Question 11.1 Explain the principle of a diminishing marginal rate of substitution within the context ofconsumer preferences and explain the relationship between this principle and the axiom ofstrictly convex preferences.1.2 Explain the difference between the ordinal and cardinal approach to utility. Also explainwhy the ordinal approach will always allow for multiple real-valued utility functions rep-resenting the same underlying (strictly monotonic) preference relations (in other words,explain why using the ordinal approach leads to non-unique utility functions).

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Question 1 1.1 Explain the principle of a diminishing marginal rate of substitution within the context of consumer preferences and explain the relationship between this principle and the axiom of strictly convex preferences.

Question 1 1.1 Explain the principle of a diminishing marginal rate of substitution within the context of consumer preferences and explain the relationship between this principle and the axiom of strictly convex preferences.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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