The marginal rate of substitution is
A) the rate at which the consumer will give up one good to get an additional unit of another good while remaining on the same indifference curve.
B) the rate at which utility increases as the consumer increases purchases of a good, holding purchases of the other good constant.
C) the rate at which a consumer will exchange a good for income holding prices constant.
D) None of the above answers is correct.
A
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To complete the theory of exchange rates, a model should be created that:
a. accommodates short-run changes in variables. b. accommodates long-run changes in variables. c. accommodates changes in expectations. d. accommodates short-run and long-run changes in variables and changes in expectations
When a firm raises the price of its product, what happens to its total revenue?
A) If demand is elastic, total revenue decreases. B) If demand is unit elastic, total revenue increases. C) If demand is inelastic, total revenue decreases. D) If demand is elastic, total revenue increases. E) If demand is unit elastic, total revenue decreases.