Question

Assume that a consumer consumes two commodities X and Y and makes five combinations for the two commodities

Combinations. X. Y.

A. 25. 3

B. 20. 5

C. 16. 10

D. 13. 18

E. 11. 28

Calculate marginal rate of Substitution and explain the answer.

Answer 1

$MRS= -(\Delta\ x$ /$\Delta\ y)$

The table below shows the $\Delta\ x$ and $\Delta\ y$ and the Marginal rate of substitution calculated from the formula above.