5 Questions
An endowment refers to ____.
The bundle of resources a person has at the beginning of an exchange
Andrew's marginal rate of substitution of hamburgers for fish sticks is 6 while Betty's is 2. Both Andrew and Betty could be made better off if:
Andrew trades between two and six of his allotment of hamburgers with Betty for a fish stick
In an Edgeworth box diagram, if the two consumers' indifference curves intersect at point A then:
Point A is on the contract curve
Which of the following is NOT a characteristic of an endowment?
A diversified portfolio
If Andrew's marginal rate of substitution of hamburgers for fish sticks is 6 and Betty's is 2, which of the following statements is true?
Andrew values hamburgers more than fish sticks
Test your knowledge on endowments and marginal rates of substitution with this quiz. Answer questions on topics such as the definition of an endowment, property rights, diversified portfolios, and least-cost production possibilities. See if you can determine the possible marginal rates of substitution for individuals based on given information.
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