The “marginal rate of substitution” between two goods is measured by:
The “marginal rate of substitution” between two goods is measured by:
A) the ratio of the market prices of the two goods.
B) the number of units of a good consumed divided by the market price of the other good.
C) the number of units of one good a consumer would give up to consume one more unit of another good, while holding total utility constant.
D) the consumer’s budget constraint divided by the price of each good.
ANSWER
C
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