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Questions and Answers
What does the slope of the indifference curve represent?
What does the slope of the indifference curve represent?
- Marginal Rate of Substitution (MRS) (correct)
- Budget constraint
- Marginal utility
- Rate of price change
Which assumption suggests that consumers prefer more goods to fewer goods?
Which assumption suggests that consumers prefer more goods to fewer goods?
- Rationality
- Transitivity
- Non-satiability (correct)
- Completeness
What is meant by 'consumer equilibrium'?
What is meant by 'consumer equilibrium'?
- The point where budget constraint equals the slope of an indifference curve
- The point where marginal utility of one product divided by its price equals the marginal utility of another product divided by its price (correct)
- The point where marginal cost equals marginal revenue
- The point where total expenditure equals total income
What does the cardinal approach of consumer equilibrium emphasize?
What does the cardinal approach of consumer equilibrium emphasize?
What is typically illustrated by an indifference curve?
What is typically illustrated by an indifference curve?
Which assumption ensures consistency in consumer choices?
Which assumption ensures consistency in consumer choices?
What is the slope of the indifference curve from point a to point b if 6 apples are given up for 1 orange?
What is the slope of the indifference curve from point a to point b if 6 apples are given up for 1 orange?
What does the move from point b to c on the indifference curve depict if 4 apples are given up for 1 orange?
What does the move from point b to c on the indifference curve depict if 4 apples are given up for 1 orange?
What does the term 'non-satiability' imply in consumer theory?
What does the term 'non-satiability' imply in consumer theory?
What does 'completeness' assumption guarantee about consumer preferences?
What does 'completeness' assumption guarantee about consumer preferences?
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