Why is the consumer’s MRS equal to the price ratio at the optimal consumption point? Give a graphical interpretation of this fact in XY space (hint: what do we know about the indifference curves and the budget line?).
Why is the consumer’s MRS equal to the price ratio at the optimal consumption point? Give a graphical interpretation of this fact in XY space (hint: what do we know about the indifference curves and the budget line?).
Chapter3: Preferences And Utility
Section: Chapter Questions
Problem 3.4P
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Why is the consumer’s MRS equal to the price ratio at the optimal consumption point? Give
a graphical interpretation of this fact in XY space (hint: what do we know about the indifference
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