Ambrose has an indifference curve with equation x₂ = 20

Question

Ambrose has an indifference curve with equation x₂ = 20 - 4x^1/2₁.When Ambrose is consuming the bundle (4, 16), his marginal rate of substitution is 25/4.

Quizplus · Accepted Answer

The marginal rate of substitution (MRS) is calculated as the negative of the slope of the indifference curve at a given point. The provided equation for the indifference curve is not clearly defined, making it impossible to accurately calculate the MRS without a proper functional form. Additionally, without a clear equation, we cannot confirm the MRS value at any specific bundle of goods.

Ambrose Has an Indifference Curve with Equation X2 = 20