[amp_mcq option1=”a-1, b-4, c-3, d-2″ option2=”a-2, b-3, c-4, d-1″ option3=”a-3, b-1, c-2, d-4″ option4=”a-4, b-2, c-1, d-3″ correct=”option1″]<\/p>\n
The correct answer is:<\/p>\n
a. Utilitarian approach – 3. U = f(x, y)
\nb. Ordinal approach – 1. Marginal rate of substitution
\nc. Price consumption curve – 2. Budget line and indifference curve
\nd. Consumer equilibrium – 4. MRSxy = MRsyx<\/p>\n
The utilitarian approach is a way of measuring utility, or happiness, that assumes that people can compare the utility of different goods and services. The ordinal approach is a way of measuring utility that assumes that people can only rank different goods and services in terms of how much they prefer them, but cannot say how much more or less utility they get from one good or service than another. The price consumption curve is a graph that shows how a consumer’s optimal consumption bundle changes as the price of one good changes. The indifference curve is a graph that shows all the combinations of goods and services that give a consumer the same level of utility. Consumer equilibrium is the point at which a consumer is maximizing their utility, given their budget constraint.<\/p>\n
The marginal rate of substitution (MRS) is the amount of one good that a consumer is willing to give up to get an additional unit of another good, while remaining at the same level of utility. The marginal rate of substitution is equal to the slope of the indifference curve. The marginal rate of substitution is also equal to the ratio of the prices of the two goods, at the point of consumer equilibrium.<\/p>\n
I hope this helps!<\/p>\n","protected":false},"excerpt":{"rendered":"
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