MRS
What is MRS?Explain it with example and digram.Explain the concept of 'Marginal Rate of Substitution' with the help of a numerical example. Describe its behaviour along an indifference curve.
Homework Answers
The Marginal Rate of Substitution (MRS) is a concept used in economics to measure the rate at which a person can give up some amount of one good in exchange for another good while maintaining the same level of satisfaction, or utility. In other words, it represents the amount of one good that a person is willing to forgo to obtain an additional unit of another good, while keeping their overall satisfaction constant.
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?
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...
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
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.
5. Consider the utility function U(x, y) = 2/x + y. 1) Is the assumption that...
5. Consider the utility function U(x, y) = 2/x + y. 1) Is the assumption that "more is better” satisfied for both goods? 2) What is MRS, for this utility function? 3) Is the marginal rate of substitution diminishing, constant, or increasing in x as the consumer substitutes x for y along an indifference curve? 4) Will the indifference curve corresponding to this utility function be convex to the origin, concave to the origin, or straight lines? Explain.
4. Consider the utility function U(x,y) -Iny (a) Find the marginal rate of substitution, MRS of...
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?
A consumer buys only two goods, X and Y. a. If the MRS between X and...
A consumer buys only two goods, X and Y. a. If the MRS between X and Y is 4 and the marginal utility of X is 20, what is the marginal utility of Y? b. If the MRS between X and Y is 3 and the marginal utility of Y is 6, what is the marginal utility of X? c. If a consumer moves downward along an indifference curve, what happens to the marginal utilities of X and Y? What...
. Given that the slope of an indifference curve at any point is the “marginal rate...
. 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)
33. Along an indifference curve a. the MRS is constant b. the ratio of the marginal...
33. Along an indifference curve a. the MRS is constant b. the ratio of the marginal utilities is constant c. the price ratio is constant. d. all of the above none of the above e.
Question 31 2 pts Refer to the following indifference curve. The marginal rate of substitution (MRS)...
Question 31 2 pts Refer to the following indifference curve. The marginal rate of substitution (MRS) between points A and B is Slices of pizza A (1,5) 5 4+2 1-1 B (2,3) 3 +1 ! C (3,2) 2 -4 D (7,1) 1 Indifference curve 0 1 2 3 4 5 6 7 8 9 10 Cans of Pepsi O 1/2 -2 0-1/2 0 -1 O 1
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?
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
5. Consider the utility function U(x, y) = 2/x + y. 1) Is the assumption that "more is better” satisfied for both goods? 2) What is MRS, for this utility function? 3) Is the marginal rate of substitution diminishing, constant, or increasing in x as the consumer substitutes x for y along an indifference curve? 4) Will the indifference curve corresponding to this utility function be convex to the origin, concave to the origin, or straight lines? Explain.
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?
33. Along an indifference curve a. the MRS is constant b. the ratio of the marginal utilities is constant c. the price ratio is constant. d. all of the above none of the above e.
Question 31 2 pts Refer to the following indifference curve. The marginal rate of substitution (MRS) between points A and B is Slices of pizza A (1,5) 5 4+2 1-1 B (2,3) 3 +1 ! C (3,2) 2 -4 D (7,1) 1 Indifference curve 0 1 2 3 4 5 6 7 8 9 10 Cans of Pepsi O 1/2 -2 0-1/2 0 -1 O 1
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