The standard consumer choice model assumes that preferences are such that the marginal rate of substitution of good X for good Y is decreasing as you more of good Y good X None of these. The stardard model has a constant marginal rate of substitution. both goods.

The standard consumer choice model assumes that preferences are such that the marginal rate of substitution of good X for good Y is decreasing as you more of good Y good X None of these. The stardard model has a constant marginal rate of substitution. both goods.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Form Utility

The term utility in general refers to the satisfaction earned from usage of a particular product or service. Utility always plays an important role because it influences various important elements like demand & thereby the price of the good or service as well. Though utility is not easy to measure, various types of economic models can be used indirectly. There can be various types of utilities like economic utility, marginal utility, cardinal utility, form utility.

Question

The standard consumer choice model assumes that preferences are such that the
marginal rate of substitution of good X for good Y is decreasing as you more of
good Y
good X
None of these. The stardard model has a constant marginal rate of substitution.
both goods.

If the marginal rate of substitution doesn't change much as you have more of one of
the goods, then the two goods are highly
complementary.
disliked.
preferred.
substitutable.

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