Indifference curves (and isoquants) have certain properties. Match the property to the assumption that guarantees it; use each letter only once. __ Indifference curves are downward sloping. __ Every consumption bundle is on an indifference curve. __ Indifference curves do not cross. __ The more you have of one good relative to the other, the less it is worth at the margin, relative to the other. Assumptions: A. Completeness B. Transitivity C. More is better D. Convex curves (“diminishing marginal rate of substitution”)
Marginal Rate of Technical Substitution
MRTS reaches a manufacturer when a part of the product is lowered to sustain the manufacturing level when the other part is extended. It is the level of the quantity that is lowered when one extra volume is used, and the output is unchanged.
Preferences and Utility Analysis
Before understanding what is preference and utility analysis, it is very important to understand the terms preference and utility separately.
Indifference curves (and isoquants) have certain properties. Match the property to the assumption that guarantees it; use each letter only once.
__ Indifference curves are downward sloping.
__ Every consumption bundle is on an indifference curve.
__ Indifference curves do not cross.
__ The more you have of one good relative to the other, the less it is worth at the margin, relative to the other.
Assumptions:
A. Completeness B. Transitivity
C. More is better D. Convex curves (“diminishing marginal rate of substitution”)
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