The absolute value of the slope of an indifference curve is called the:
a. marginal rate of transformation.
b. transitivity slope.
c. indifference rate of preference.
d. marginal rate of substitution.
d
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On the graph above, suppose the economy is at point 6. Which sequence of points best illustrates the short-run and then long-run impacts of an "expansionary fiscal contraction"?
A) 2, 7, 8 B) 4, 7, 1 C) 1, 4, 5 D) 1, 4, 2
In an economy consisting of only two goods, corn and cloth, the amount of extra cloth that can be produced efficiently if corn output is reduced by one unit is equal to:
a. the rate of technical substitution for corn divided by the rate of technical substitution for cloth. b. the rate of technical substitution for cloth divided by the rate of technical substitution for corn. c. the marginal cost of producing cloth divided by the marginal cost of producing corn. d. the marginal cost of producing corn divided by the marginal cost of producing cloth.