Figure 21-5 -Refer to Figure 21-5.What occurs at point B A)MRSXY PY/Px B)MRSXY = PX/PY C)MRSXY PX/PY

Name: Figure 21-5 -Refer to Figure 21-5.What occurs at point B A)MRSXY > PY/Px B)MRSXY = PX/PY C)MRSXY PX/PY
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Question

Figure 21-5
 
-Refer to Figure 21-5.What occurs at point B
A)MRSXY > PY/Px 
B)MRSXY = PX/PY 
C)MRSXY < PX/PY 
D)MRSXY > PX/PY

Quizplus · Accepted Answer

At point B, the marginal rate of substitution (MRS) is greater than the price ratio (PX/PY), indicating that the consumer is willing to give up more of good Y for good X than the market requires.

Figure 21-5 -Refer to Figure 21-5.What Occurs at Point B