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.
Jane loves hamburgers and dislikes soft drinks. If she is served a soft drink, she will pour it down the drain rather than drink it.
1.) Using the line drawing tool, graph an indifference curve that is consistent with Jane's preferences. Label this line 'U1'.
2.) Using the line drawing tool, graph another indifference curve for Jane showing a higher level of utility. Label this line 'U2'.
Carefully follow the instructions above, and only draw the required
object.
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