) What is the marginal rate of substitution, MRS? State the definition and explain, in words, what...
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Question:
) What is the marginal rate of substitution, MRS? State the definition and explain, in words, what it means.
b) MRS will have an influence on the shape of an indifference curve. What influence?
c) Often, we assume that consumers have diminishing MRS. Explain what that means and how it is reflected in indifference curves.
d) Can you draw an indifference curve that does not have diminishing MRS, but that is still allowed?
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