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Explain the following terms as used in microeconomics. (a) Optimization principle (b) Equilibrium principle (c) Pareto efficiency (d) Budget set. (e) Marginal rate of substitution

      

Explain the following terms as used in microeconomics
a. Optimization principle.

b.Equilibrium principle.

c. Pareto efficiency.

d. Budget set.

e. Marginal rate of substitution

  

Answers


chemutai
a.This principle state that people try to choose the best pattern of consumption that they cab afford.

b.This principle state that prices adjust until the people demand of something is equal to the amount supplied.

c.This is a useful criteria for comparing the outcomes of different economics institution.

d.consist of all bundles that are affordable at a given price and income.

e.Refers to the slope of indifference curve that measures the rate at which the consumer is just willing to substitute one good for the other.
Chemutai mercy answered the question on November 18, 2017 at 08:32


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