Suppose that MRS_XY = Y/X. As X increases: A) MRS_XY increases. B) MRS_XY decreases. C) MRS_XY remains constant. D) MRS_XY increases and then decreases.

Question

Quizplus · Accepted Answer

Given that MRS_XY = Y/X, as X increases, the value of Y/X decreases, assuming Y remains constant. This is because the denominator of the fraction is getting larger, which reduces the overall value of the fraction.

Suppose That MRSXY = Y/X. as X Increases

Suppose That MRS_XY = Y/X. as X Increases