If a consumer's marginal rate of substitution equals 2 eggs for 1sandwich,
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1 mark, −0.33MicroeconomicsConsumer preferences and utilityMarginal rate of substitution and convexityModerateabout 1 min
UoH 2010 Question 47: Consumer preferences and utility
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If a consumer's marginal rate of substitution equals 2 eggs for 1sandwich, (A) the consumer's indifference curve must be positively sloped. (B) the consumer's indifference curve must be convex with respect to the origin of the graph. (C) the ratio of the consumer's marginal utility of 1 egg to that of 1 sandwich must equal 1/2. (D) all of the above are true.
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What this question tests
This question is on Marginal rate of substitution and convexity, part of Consumer preferences and utility in Microeconomics.
The rate at which a consumer trades one good for another, and why it diminishes along a convex indifference curve.
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