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-The Above Figure Shows Jane's Budget Line and Two of Her

Question 342

Multiple Choice

-The above figure shows Jane's budget line and two of her indifference curves. Jane's marginal rate of substitution is A) the rate at which she would give up a lobster dinner for a steak dinner and consider herself just as well off. B) equal to the ratio of the price of a steak dinner to the price of a lobster dinner when she is at her best affordable point. C) equal to 2 lobster dinners per steak dinner at her best affordable point. D) Both answers A and B are correct.
-The above figure shows Jane's budget line and two of her indifference curves. Jane's marginal rate of substitution is


A) the rate at which she would give up a lobster dinner for a steak dinner and consider herself just as well off.
B) equal to the ratio of the price of a steak dinner to the price of a lobster dinner when she is at her best affordable point.
C) equal to 2 lobster dinners per steak dinner at her best affordable point.
D) Both answers A and B are correct.

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