Question

prove that at consumer's optimum point on an indifference curve the MRS is equal to the ratio of the prices​

Answer 1

Answer:

Economists typically use a different set of tools than those presented in the chapter up to this point to analyze consumer choices. While somewhat more complex, the tools presented in this section give us a powerful framework for assessing consumer choices.

We will begin our analysis with an algebraic and graphical presentation of the budget constraint. We will then examine a new concept that allows us to draw a map of a consumer’s preferences. Then we can draw some conclusions about the choices a utility-maximizing consumer could be expected to make.