Figure 21-9 -Refer to Figure 21-9.Bundle B represents a point where A) MRS_xy P_y/P_x. B) MRS_xy = P_x/P_y. C) MRS_xy P_x/P_y.

Question

Figure 21-9 -Refer to Figure 21-9.Bundle B represents a point where A) MRS_xy > P_y/P_x. B) MRS_xy = P_x/P_y. C) MRS_xy < P_x/P_y. D) MRS_xy > P_x/P_y.

Quizplus · Accepted Answer

Bundle B represents a point where the marginal rate of substitution (MRS) of good x for good y is greater than the price ratio of good x to good y, indicating that the consumer is willing to give up more of good y for an additional unit of good x than the market requires.

Figure 21-9 -Refer to Figure 21-9.Bundle B Represents a Point Where