What Is marginal rate of substitution?

Suppose the price of bananas falls. Explain how the income and substitution effects work in the adjustment to a new level of banana consumption.

Bob lives in San Diego and loves to eat desserts. He spends his entire weekly allowance on pudding and pie. A bowl of pudding is priced at $1.00, and a piece of apple pie is priced at $4.00. At his current consumption point, Bob's marginal rate of substitution (MRS) of pudding for pie is 4. This means that Bob is willing to trade four bowls of pudding per week for one piece of pie per week. Does Bob's current bundle maximize his utility—in other words, make him as well off as possible? If not, how should he change it to maximize his utility? Bob could increase his utility by buying more pudding and less pie per week.   Bob's current bundle maximizes his utility, and he should keep it unchanged.   Bob could increase his utility by buying less pudding and more pie per week.

Jeff spends all of his money on housing (H) and other stuff (S) and has a diminishing marginal rate of substitution between housing and stuff. Jeff used to live and work in a small town where housing prices were relatively low. His company has decided to transfer him to a large city where housing prices are higher. (For simplicity, assume that all other prices are the same.) Using a diagram, explain to Jeff's company how to find the amount it needs to raise his salary to keep him just as well after the 2. transfer as he was before. Tridor

The marginal rate of substitution is the slope of the budget line. T or F

If Molly Bee increases her work hours when her wage increases, then  the income effect of the wage increase outweighs the substitution effect. the substitution effect of the wage increase outweighs the income effect. leisure is an inferior good to Molly. Molly' is spending beyond her means.

One of the following is not truc about the characteristics of well-behaved indifference curves: A. They are convex to the origin B. All points on an indifference curve vield the same level of satisfaction C. They are straight line D. As we move closer to the origin, the level of satisfaction will diminish E. None 5. When the short run average product of labor is declining but positive, the marginal product of labor is, C. Zero D. Any of the above is possible A. Negative B. Declining 6. When marginal utility is positive and declining, A. Total utility decreases at a diminishing rate B. Total utility increases at a diminishing rate C. Total utility increases at an increasing rate D. Total utility is negative 7. If the price elasticity of demand is less than 1 and price increases by 8%, then, quantity demand will, C. Increase by more than 8% A. Decrease by less than 8% D. Remains the same B. Decrease by more than 8% 8. refers to attitude of an individual who prefers risk income than…

Briefly explain and graphically illustrate the property of diminishing marginal rate of technical substitution and its relation to marginal productivities.

If Porsha view 3 glasses of juice as a perfect substitute for one cup of soda and vice versa, what is her marginal rate of substitution between juice and soda?

Briefly define and graphically illustrate the law of diminishing marginal rate of technical substitution.