« previous next »

Author Question: Explain the difference between the marginal rate of substitution and the marginal rate of ... (Read 67 times)

bio_gurl

  • Hero Member
  • *****
  • Posts: 524
on: Jul 1, 2018
Explain the difference between the marginal rate of substitution and the marginal rate of transformation.
 
  What will be an ideal response?

Question 2

The slope of the budget line represents the rate at which the consumer is willing to trade one good for another at any given bundle.
 
  Indicate whether the statement is true or false
Microeconomics ¦ Perloff ¦ 8th Edition
Buy Test-Bank


kilada

  • Sr. Member
  • ****
  • Posts: 311
Reply #1 on: Jul 1, 2018
Answer to Question 1

The marginal rate of substitution is a consumer's willingness to trade one good for another based on utility. The marginal rate of transformation is the consumer's ability to trade one good for another based on prices.

Answer to Question 2

False. This describes the slope of the indifference curve. The slope of the budget line represents the rate at which the consumer must trade one good for another at any given bundle.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Aspirin is the most widely used drug in the world. It has even been recognized as such by the Guinness Book of World Records.

Did you know?

About 60% of newborn infants in the United States are jaundiced; that is, they look yellow. Kernicterus is a form of brain damage caused by excessive jaundice. When babies begin to be affected by excessive jaundice and begin to have brain damage, they become excessively lethargic.

Did you know?

Hippocrates noted that blood separates into four differently colored liquids when removed from the body and examined: a pure red liquid mixed with white liquid material with a yellow-colored froth at the top and a black substance that settles underneath; he named these the four humors (for blood, phlegm, yellow bile, and black bile).

Did you know?

Oliver Wendell Holmes is credited with introducing the words "anesthesia" and "anesthetic" into the English language in 1846.

Did you know?

People who have myopia, or nearsightedness, are not able to see objects at a distance but only up close. It occurs when the cornea is either curved too steeply, the eye is too long, or both. This condition is progressive and worsens with time. More than 100 million people in the United States are nearsighted, but only 20% of those are born with the condition. Diet, eye exercise, drug therapy, and corrective lenses can all help manage nearsightedness.

Brachial Plexus drawing plus the difference in the forearm Brachial Plexus drawing plus the difference in the forearm
A single base substitution leading to a single amino acid substitution in the hemoglobin beta chain A single base substitution leading to a single amino acid substitution in the hemoglobin beta chain
Inverse Relation Between IQ and Disease. Could this explain the Flynn effect? Inverse Relation Between IQ and Disease. Could this explain the Flynn effect?
Sample Workout in the Target Heart Rate Range Sample Workout in the Target Heart Rate Range
Maximal Heart Rate Over Time Maximal Heart Rate Over Time
How to perform the substitution rule with integrals (Part 2) How to perform the substitution rule with integrals (Part 2)
Video: Stimulus (introduction)

For a complete list of videos, visit our video library