class, assuming convex indifference curves we demonstrated graphically the substitution and income effects of a drop in the price of x on the quan- tity of x consumed, assuming x was normal. You should be comfortable producing graphical representations of this decomposition. Show the sub- stitution and income effects of an increase in the pr
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.
n class, assuming convex indifference
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