380 Quiz 2 Answers

380 Quiz 2 Answers - 3. The marginal rate of substitution...

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Quiz 2 Economics 380 W2011 Name________________________ 1. An indifference curve represents what (give a short definition). All points with a common level of utility or u(x,y)=K where K is a constant. 2. A downward sloping indifference curve represents what? Substitution. One is willing to substitute y for x and be just as well off (same utility)
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Unformatted text preview: 3. The marginal rate of substitution of y for x (y on the vertical axis) represents what? Depict it with a graph. It represents the maximum amount of y one is willing to give up for a unit of x. y x MR S...
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This note was uploaded on 04/07/2011 for the course ECON 380 taught by Professor Showalter,m during the Winter '08 term at BYU.

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