what is the marginal rate of substitution (MRS)? a) The ratio of the amounts of the...
what is the marginal rate of substitution (MRS)?
a) The ratio of the amounts of the two goods at a point on the indifference curve.
b) The amount of one good that the consumers is willing to trade for one unit of the other.
c) The change in the consumers utility when one good is substituted for another.
d) The slope of the indifference curve.
Homework Answers
Option B.
- Marginal rate of substitution can be defined as the amount of one good that the consumer is willing to trade for one unit of the other.
- It is the rate at which a consumer gives up certain units of a particular good in order to gain one more extra unit of another good.
- This will not cause any change in the utility or in other words there is no gain or loss in the utility when goods are substituted over one another.
Add Answer to:
what is the marginal rate of substitution (MRS)?
a) The ratio of the amounts of the...
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. Given that the slope of an indifference curve at any point is the “marginal rate of substitution” between Y and X explain/prove that MRS is equal to the ratio of the consumer’s marginal evaluation of good X to his/her marginal evaluation of good Y (i.e. MRS = -MUx/MUy). (2 pts)
7) a) What is the relationship between marginal rate of substitution (MRS) and the concept of...
7) a) What is the relationship between marginal rate of substitution (MRS) and the concept of an indifference curve? b) Suppose a consumer's utility function is defined by u(x,y)=3x+y for every x>0 and y0. Calculate a formula for MRS at every combination of x and y. c) Suppose that P,-/ P, and that this consumer has an initial endowment of wealth w=100. Find this individual's utility maximizing demand of x and y. 10 pts
2. What's the definition of marginal rate of substitution? What happens to the MRS as you...
2. What's the definition of marginal rate of substitution? What happens to the MRS as you move along a convex indifference curve? A linear indifference curve?
Chapter 7 Vocabulary Name: Match the term with the correct definition Income effect a trying to...
Chapter 7 Vocabulary Name: Match the term with the correct definition Income effect a trying to get the biggest bang for the buck. Utility maximizing rule b as the price of a good drops, consumers have more money to spend on it and other goods Consumer equilibrium The amount of satisfaction gained from consumption of goods and services. d shows the combinations of two items that can be purchased with a limited amount of money. Law of diminishing marginal utility...
i) Find the Marginal Rate of Substitution at the given bundle, and ii) use a graph...
i) Find the Marginal Rate of Substitution at the given bundle,
and ii) use a graph to indicate the given bundle,
and accurately draw the indifference curve that
goes through that bundle. Be sure to label you graph carefully and
accurately. In all cases put the amount of good X on the horizontal
axis, and the amount of good Y on the vertical axis.
c) The consumers utility function is given by U(X,Y)-4X + 2Y and the given bundle is...
4. Consider the utility function U(x,y) -Iny (a) Find the marginal rate of substitution, MRS of...
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7. (4 Points) Describe what the marginal rate of substitution of x for Y (MRSxy) to...
7. (4 Points) Describe what the marginal rate of substitution of x for Y (MRSxy) to us about a consumer's preferences between the two goods. 8 (4 Points) Suppose you have preferences over two goods, bottles of wine (good X) and slices of pizza (good Y). Explain what it means that for the bundle A = (3, 15), the MRSxy = 2. 9. For this question, use the utility function U(X,Y)= XY. (a) (2 Points) What is the marginal utility...
1. (18 points) For each of the following situations, i) Find the Marginal Rate of Substitution...
1. (18 points) For each of the following situations, i) Find the Marginal Rate of Substitution at the given bundle, and ii) use a graph to indicate the given bundle, and accurately draw the indifference curve that goes through that bundle. Be sure to label you graph carefully and accurately. In all cases put the amount of good X on the horizontal axis, and the amount of good Y on the vertical axis. a) The consumers utility function is given...
7. (4 Points) Describe what the marginal rate of substitution of X for Y (MRSxy) telle...
7. (4 Points) Describe what the marginal rate of substitution of X for Y (MRSxy) telle us about a consumer's preferences between the two goods. 8. (4 Points) Suppose you have preferences over two goods, bottles of wine (good X) and slices of pizza (good Y). Explain what it means that for the bundle A = (3.15), the MRSxy = 2 9. For this question, use the utility function U(X,Y)= XY. (a) (2 Points) What is the marginal utility of...
Peminat mobil Toyota Innova diketahui mempunya marginal rate of substitution (MRS) dari space (luas interior) dan...
Peminat mobil Toyota Innova diketahui mempunya marginal rate of substitution (MRS) dari space (luas interior) dan percepatan (acceleration) yang rendah. Sedang peminat mobil Ferarri mempunyai MRS yang tinggi. Gambarkan indifference curve dari kedua kelompok tersebut dan jelaskan. Toyota Innova car enthusiasts are known to have a low marginal rate of substitution (MRS) of space (interior area) and acceleration (acceleration). Ferarri car enthusiasts have a high MRS. Draw the indifference curve of the two groups and explain.
7) a) What is the relationship between marginal rate of substitution (MRS) and the concept of an indifference curve? b) Suppose a consumer's utility function is defined by u(x,y)=3x+y for every x>0 and y0. Calculate a formula for MRS at every combination of x and y. c) Suppose that P,-/ P, and that this consumer has an initial endowment of wealth w=100. Find this individual's utility maximizing demand of x and y. 10 pts
2. What's the definition of marginal rate of substitution? What happens to the MRS as you move along a convex indifference curve? A linear indifference curve?
Chapter 7 Vocabulary Name: Match the term with the correct definition Income effect a trying to get the biggest bang for the buck. Utility maximizing rule b as the price of a good drops, consumers have more money to spend on it and other goods Consumer equilibrium The amount of satisfaction gained from consumption of goods and services. d shows the combinations of two items that can be purchased with a limited amount of money. Law of diminishing marginal utility...
i) Find the Marginal Rate of Substitution at the given bundle,
and ii) use a graph to indicate the given bundle,
and accurately draw the indifference curve that
goes through that bundle. Be sure to label you graph carefully and
accurately. In all cases put the amount of good X on the horizontal
axis, and the amount of good Y on the vertical axis.
c) The consumers utility function is given by U(X,Y)-4X + 2Y and the given bundle is...
4. Consider the utility function U(x,y) -Iny (a) Find the marginal rate of substitution, MRS of this function. Interpret the result (b) Find the equation of the indifference curve for this function (c) Compare the marginal utility of x and y. How do you interpret these functions? How might a consumer choose between z and y as she tries to increase utility by, for example, consuming more when their income increases?
7. (4 Points) Describe what the marginal rate of substitution of x for Y (MRSxy) to us about a consumer's preferences between the two goods. 8 (4 Points) Suppose you have preferences over two goods, bottles of wine (good X) and slices of pizza (good Y). Explain what it means that for the bundle A = (3, 15), the MRSxy = 2. 9. For this question, use the utility function U(X,Y)= XY. (a) (2 Points) What is the marginal utility...
1. (18 points) For each of the following situations, i) Find the Marginal Rate of Substitution at the given bundle, and ii) use a graph to indicate the given bundle, and accurately draw the indifference curve that goes through that bundle. Be sure to label you graph carefully and accurately. In all cases put the amount of good X on the horizontal axis, and the amount of good Y on the vertical axis. a) The consumers utility function is given...
7. (4 Points) Describe what the marginal rate of substitution of X for Y (MRSxy) telle us about a consumer's preferences between the two goods. 8. (4 Points) Suppose you have preferences over two goods, bottles of wine (good X) and slices of pizza (good Y). Explain what it means that for the bundle A = (3.15), the MRSxy = 2 9. For this question, use the utility function U(X,Y)= XY. (a) (2 Points) What is the marginal utility of...
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