Author Question: In the figure above showing the costs and benefits of paper production, there is an A) external ... (Read 69 times)

tiffannnnyyyyyy · **on:** Jun 29, 2018

In the figure above showing the costs and benefits of paper production, there is an

A) external cost associated with paper production.
B) external benefit associated with paper production.
C) external cost associated with paper consumption.
D) external benefit associated with paper consumption.

Question 2

In the above figure, what is the magnitude of the marginal rate of substitution (MRS) at point a?

A) 1/2
B) the rate at which the consumer will give up magazines to purchase more CDs while preferring the new combination to the old
C) 2
D) The question cannot be answered without more information.