Ambrose has an indifference curve with equation x 2 = 20 - 4x 1/2 1 .When Ambrose is consuming the bundle (4, 16), his marginal rate of substitution is 25/4.

Question

Ambrose has an indifference curve with equation x 2  = 20 - 4x 1/2 1 .When Ambrose is consuming the bundle (4, 16), his marginal rate of substitution is 25/4.

Meredith Hutton · Accepted Answer

Final Answer : False, Explanation :  The marginal rate of substitution (MRS) is calculated as the negative of the slope of the indifference curve at a given point. The provided equation for the indifference curve is not clearly defined, making it impossible to accurately calculate the MRS without a proper functional form. Additionally, without a clear equation, we cannot confirm the MRS value at any specific bundle of goods.

Ambrose has an indifference curve with equation x₂ = 20 - 4x^1/2₁.When Ambrose is consuming the bundle (4, 16), his marginal rate of substitution is 25/4.

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Ambrose has an indifference curve with equation x2 = 20 - 4x1/21.When Ambrose is consuming the bundle (4, 16), his marginal rate of substitution is 25/4.

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Ambrose has an indifference curve with equation x₂ = 20 - 4x^1/2₁.When Ambrose is consuming the bundle (4, 16), his marginal rate of substitution is 25/4.