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Find the TRUE statement based on following graph 7. 12 10 B-i Uo Tonys Frozen Pizzas a. All possible indifference curves are
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Answer #1

Ans.7. d) The marginal rate of substitution is diminishing.

The marginal rate of substitution is that rate at which a consumer exchange units of one good for units of another good while maintaining the same level of satisfaction. It represents as the slope of an indifference curve. The marginal rate of substitution is diminishing, the indifference curve must be convex.

Ans. 8.b) Marginal utility

Marginal utility is defined as obtained the additional utility from the consumption of an additional unit of the good.

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