One reason more sport utility vehicles (SUVs)are driven in the United States than in Europe is
A) different marginal rates of substitution.
B) different marginal rates of transformation.
C) the United States hasn't had a recession since 2000-2001.
D) Either A or B

Question

Quizplus · Accepted Answer

The marginal rate of substitution refers to the rate at which a consumer is willing to trade one good for another, while the marginal rate of transformation refers to the rate at which one good can be converted into another. Neither of these factors can fully explain the difference in SUV usage between the US and Europe. The US economy has experienced recessions since 2000-2001, so option C is ruled out. Therefore, the best answer is D, since either of these factors could potentially contribute to the difference in SUV usage between the US and Europe.

One Reason More Sport Utility Vehicles (SUVs)are Driven in the United