The budget line shows: all possible combinations of two goods that yield the same level of utility to the consumer. the amount of product A that a consumer is willing to give up to obtain one more unit of product B. all possible combinations of two goods that can be purchased, given money income and the prices of the goods. all equilibrium points on an indifference map.
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.
Question 21
The budget line shows:
all possible combinations of two goods that yield the same level of utility to the consumer.
the amount of product A that a consumer is willing to give up to obtain one more unit of product B.
all possible combinations of two goods that can be purchased, given money income and the prices of the goods.
all equilibrium points on an indifference map.
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