Explain the concept of marginal rate of substitution and budget line wit the help of numerical example
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MRS or Marginal Rate of Substitution is the rate at which one good is substituted for the other. ... So an IC can be made for food as one good and “other goods” as another. When a consumer moves down an IC then this means he is consuming more of the good taken at X-axis and sacrificing more units of good at Y-axis.
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MRS or Marginal Rate of Substitution is the rate at which one good is substituted for the other. ... So an IC can be made for food as one good and “other goods” as another. When a consumer moves down an IC then this means he is consuming more of the good taken at X-axis and sacrificing more units of good at Y-axis.
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