Multiple Choice
(Figure: Marginal Rate of Substitution) Refer to the figure.What is the marginal rate of substitution (MRS) betweenBundle A and Bundle B?
Figure: Marginal Rate of Substitution
A) 4.5; the consumer is willing to trade 4.5 movie downloads for one music download.
B) three; the consumer is willing to give up three movie downloads for an additional music download.(True Answer
) Correct
C) 1.5; the consumer will buy 1.5 times as many music downloads as movie downloads.
D) one; the consumer faces a one-to-one trade-off.
Correct Answer:
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