Tessa likes both ice-creams and pies. However, if she eats too much of them, she gets sick. That is, cating ico-creams or pics beyond a certain amount lowers Tessa's utility. Draw a set of indifference curve which might represent Tessa's preferences for ice-creams and pies.

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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.