Tom is willing to forego two gallons of milk in order to try his first container of rice pudding. However, he would only give up a gallon of milk for each additional container of rice pudding. What will be the MRS on Tom's indifference curve over the range from where he consumes zero rice pudding to where he consumes one container of rice pudding? a. 2 b. 1 C. 1/2 d. None of the above

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Revealed Preferences and Budget Constraint Analysis

Revealed means “Let Out,” and Preference means “Choice”; Choice Reveals Preference.