"As Jake consumes more sodas over the course of a day, it is likely that his marginal rate of substitution of sodas for other goods will rise." Is the previous statement correct or incorrect?
What will be an ideal response?
The statement is incorrect. The principle of diminishing marginal rate of substitution means that as Jake consumes more sodas, he is willing to give up fewer other goods in order to get an additional soda.
Economics
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If the Fed buys Treasury bills, this will shift the
A) money demand curve to the right. B) money supply curve to the left. C) money demand curve to the left. D) money supply curve to the right.
Economics
In the above table, the cross price elasticity of demand for good Z with good Y when PY rises from $15 to $18 is
A) -2.20. B) +2.20. C) +1.10. D) -1.10.
Economics