Question

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

Combination Units of X Units of 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

$MRS=\frac{∆x}{∆y}$

We formulate a table showing $∆x$ and $∆y$ and then calculating MRS using the above formula;