Exercises · Q9
Q.
A consumer is indifferent between the following combinations of goods X and Y. Compute the Marginal Rate of Substitution between each successive pair, and state whether the Law of Diminishing MRS holds.
| Combination | Units of X | Units of Y |
|---|---|---|
| A | 2 | 15 |
| B | 3 | 11 |
| C | 4 | 8 |
| D | 5 | 6 |
| E | 6 | 5 |
Tamil Nadu DgeTextbookSubjectiveImportance★★★★★
10% · 4/41 Questions
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Start your 14-day free trial to unlock the full solution →Computing for each successive move (each move has ):
| Move | ΔX | ΔY | MRSxy |
|---|---|---|---|
| A → B | +1 | −4 | 4 |
| B → C | +1 | −3 | 3 |
| C → D | +1 | −2 | 2 |
| D → E | +1 | −1 | 1 |
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