Suppose consumers use k units of good X and w units of good Y in fixed proportion. Then, a) Xand Y are goods and indifference curve is bowed inward towards origin b) Xand Y are perfect complements and indifference curves are L shaped c) Xand Y are goods and indifference curves are lines since marginal rate of substitution is constant. d) X and Y are perfect substitutes and indifference curve is bowed inward towards origin.
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.
Suppose consumers use k units of good X and w units of good Y in fixed proportion. Then,
a) Xand Y are goods and indifference curve is bowed inward towards origin
b) Xand Y are perfect complements and indifference curves are L shaped
c) Xand Y are goods and indifference curves are lines since marginal rate of substitution is constant.
d) X and Y are perfect substitutes and indifference curve is bowed inward towards origin.
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