A. Due to continuous decline of marginal rate of substitution B. Due to law of diminishing marginal utility C. Due to monotonic preferences D. Both a and b Answer: A Q.4 Which of the following …

A consumer consumes only two goods. For the consumer to be in equilibrium why must marginal rate of substitution be equal to the ratio of prices of the two goods? Explain.ORA consumer …

The law of diminishing marginal rate of substitution is a theory that states that, as the quantity of a commodity increase, the marginal rate of its price falls.

The correct option is B marginal rate of substitution The slope of IC curve is measured by marginal rate of substitution, and is expressed as ‘Change in Y/Change in X’. The consumer, …

Question 6 Expand MRS. Ans: MRS stands for Marginal Rate of Substitution. Question 7 Give 3 Assumptions of Indifference Curve. Ans: The three assumptions of indifference curve are : …

To understand total utility, we must look into the concept of the law of diminishing marginal utility. It states that as more units of a single good or service are consumed, the additional …

Introduction The following are the economics abbreviations that are used in Class 12th Economics syllabus frequently. Students are advised to learn the full form of each and every abbreviation. …

The law of diminishing marginal product or productivity is an economic theory. It proclaims that increasing one input constant and maintaining other inputs constant helps in increasing the …

Question 10 What is the reason behind a convex indifference curve? Answer: The reason behind a convex indifference curve is the diminishing marginal rate of substitution. Question 11 Which …

According to the law of variable proportions, the marginal product of an input increases initially. After a definite level (degree) of employment, it starts decreasing. Hence, the MP curve looks …