A marginal rate of substitution formula tells us:
A. the rate at which the consumer is willing to exchange one good for another, given the level of utility.
B. the rate at which the consumer is willing to exchange one good for another, given the amounts consumed.
C. the rate at which the consumer is willing to exchange one good for another, given the consumer's income.
D. the rate at which the consumer is willing to exchange one good for another, given the prices of the goods.
B. the rate at which the consumer is willing to exchange one good for another, given the amounts consumed.
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A negative externality occurs when
A) there is rent-seeking. B) benefits are imposed on individuals that are not part of a transactions. C) there is creative destruction. D) costs are imposed on individuals that are not part of a transaction.
The GDP deflator: a. includes fewer goods and services than the CPI
b. generally rises substantially faster than the CPI during inflationary conditions. c. ignores investment goods and goods produced by the government. d. is the broadest generally reported measure of inflation.