Question

Identify the correct pair of items from the following Columns I and II:

Columns I	Columns II
(1) Marginal Rate of Substitution (MRS)	(a) It states the real employment of the consumer from which he can purchase certain qualitative bundles of three goods at given price.
(2) Consumer's Bundle	(b) It refers to the number of units of good Y which the consumer is willing to gain for an additional unit of goodX.
(3) Budget set	(c) It is quantitative combination of those bundles which a consumer can purchase from his given income at prevailing market prices.
(4) Consumer Budget	(d) It is a qualitative combination of three goods which can be purchased by a consumer from his given expenses at given prices.

Options

• 1 - (a)

• 2 - (b)

• 3 - (c)

• 4 - (d)

Answer 1

3 - (c)

Explanation:

1. Marginal Rate of Substitution (MRS): It's the number of units of good Y that a customer is ready to give up in exchange for an extra unit of good X.
2. Consumer's Bundle: It is a high-quality combination of three commodities that a consumer can buy with his pre-determined budget and at pre-determined costs.
3. Budget set: It is a quantitative combination of those bundles that a consumer can purchase at current market pricing with his specified income.
4. Consumer Budget: It specifies the consumer's actual job, from which he can purchase particular high-quality bundles of three things at a set price.