13.9. Preferences and indifference curves. Assume that a con sumer purchases only two goods, x and y. Based on the information 3.3. THE MARGINAL RULE 124 in each of the following questions, sketch a plausible set of indiffer ence curves (that is, draw at least two curves, and indicate the direc tion of higher utility). (a) Nomis enjoys muffins (x) and chai latte (y) if they are consumed together. (b) Tra likes chocolate (x) but he hates broccoli (y). (c) Aras likes steaks (x) but she doesn't care one way or the

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Q: Total utility (utils) 0 25 45 60 70

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Q: None

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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.