# Based on the below graph showing a consumer's budget line and some indifference curves, answer...

## Question:

Based on the below graph showing a consumer's budget line and some indifference curves, answer the following questions. The consumer's income is {eq}\$ 600 {/eq}.

a) If the consumer is buying the combination at point B, the MRS is {eq}\cdots \cdots \cdots {/eq} than the price {eq}\cdots \cdots \cdots {/eq}. So the consumer should buy more {eq}\cdots \cdots \cdots {/eq} and less {eq}\cdots \cdots \cdots {/eq} to increase utility.

b) At point B, the MUX/PX is {eq}\cdots \cdots \cdots {/eq} than the MUY/PY.

## MRS:

MRS is the marginal rate of substitution, It is the slope of the indifference curve which shows the rate at which one good is sacrificed to gain another good.

## Answer and Explanation: 1

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View this answera) If the consumer is buying the combination at point B, the MRS is **less** than the price **ratio** . So the consumer should buy more **Y** and less **X** to...

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Chapter 3 / Lesson 2Learn about utility maximization. Discover various types of utility, examine utility maximizing rules, and study examples of maximizing utilities in economics.

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