An optimizing consumer will select the consumption bundle in which the marginal rate of substitution
a. is equal to the price of the least-expensive good.
b. exceeds the marginal utility of each good by the greatest amount.
c. is less than the slope of the budget constraint.
d. None of the above is correct.
d
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According to this Application, for approximately 12 million homeowners in 2012, the amount owed on mortgages was higher than the actual value of the homes. Homeowners who find themselves in this situation are said to be
A) "financially grounded." B) "subprime borrowers." C) "underwater." D) "shadow mortgage holders."
Why would large department stores such as Home Depot rather face shortages than increase the prices of basic food and repair items in cases of natural disasters such as Hurricanes?
a. They do not want to increase sales b. They are maximizing sales c. They do not want to be viewed as unfair d. All of the above