Assume Diana buys sweatshirts and T- shirts. Diana's marginal rate of substitution is
A) the rate at which she is willing to substitute sweatshirts for T- shirts.
B) the ratio of the MU of sweatshirts to the price of sweatshirts.
C) the point where she is maximising utility given her budget constraint.
D) the ratio of the price of T- shirts to the price of sweatshirts.
Correct Answer:
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A)
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