Diminishing marginal rate of substitution implies that the marginal rate of substitution
A. falls as one move to higher (northeast) in the indifference curve map.
B. falls as one travels down (eastward) on an indifference curve.
C. rises as one travels down (eastward) on an indifference curve.
D. stays the same as one travels down (eastward) on a typical indifference curve.
Answer: B
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The critical factor in maintaining the value of the dollar is
A) confidence the supply of dollars will be limited. B) government budget deficits. C) government budget surpluses. D) the U.S. balance of international payments. E) vigorous economic competition.
Which of the following describes the behavior of M1 in recent decades?
A) it soared during the recessions of 1990-91, 2001, and 2007-2009 B) it tended to grow more rapidly than M2 C) it was more stable than M2 D) it has not declined since the 1970s