Why does your marginal rate of substitution between chocolate and vanilla ice cream decline continuously as you move rightward on your indifference curve between the two?
What will be an ideal response?
With chocolate on the vertical axis and vanilla on the horizontal, as you move rightward along your indifference curve, the more chocolate you give up and the less you have remaining. As a result, you grow to value your chocolate more and more and your vanilla less and less. You therefore become willing to give up less chocolate to get more vanilla.
Economics
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In the above figure, if the budget line shifts from RT to RS, the income effect is illustrated by the move from
A) a to b. B) a to c. C) b to c. D) T to S.
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The optimal subsidy for private giving to a public good increases as the number of people benefiting from the public good increases.
Answer the following statement true (T) or false (F)
Economics