Marginal Utility and MRS:
Assume that our original bundle is bundle C in our previous example, and that we add one unit of good 1 so that we end up with bundle B. The marginal utility of good 1 is then,
MU1 = ΔU/ΔQ1 = [U(B) – U(C)]/ ΔQ1
If we now add one unit of good 2 to bundle B, we end up with bundle A, and the change in utility is,
MU2 = ΔU/ΔQ2 = [U(B) – U(C)]/ ΔQ2
The actual numbers can easily be seen to be MU1 = 2, and MU2 = 3. But again these numbers have no specific meaning. However, let us take the ratio of these expressions, Note that the last ratio is (the negative of) the marginal rate of substitution between good 1 and 2, hence,
MRS12 = - MU1/MU2
An important point here is that if we apply any of the transformation in the previous example, the marginal utilities would be affected by (most of) these transformations, but the MRS12, which shows the shape of the indifference curves, would not.
Latest technology based Economics Online Tutoring Assistance
Tutors, at the www.tutorsglobe.com, take pledge to provide full satisfaction and assurance in Intermediate Microeconomics homework help via online tutoring. Students are getting 100% satisfaction by online tutors across the globe. Here you can get homework help for Intermediate Microeconomics, project ideas and tutorials. We provide email based Intermediate Microeconomics homework help. You can join us to ask queries 24x7 with live, experienced and qualified online tutors specialized in Intermediate Microeconomics. Through Online Tutoring, you would be able to complete your homework or assignments at your home. Tutors at the TutorsGlobe are committed to provide the best quality online tutoring assistance for Economics homework help and assignment help services. They use their experience, as they have solved thousands of the Economics assignments, which may help you to solve your complex issues of Intermediate Microeconomics. TutorsGlobe assure for the best quality compliance to your homework. Compromise with quality is not in our dictionary. If we feel that we are not able to provide the homework help as per the deadline or given instruction by the student, we refund the money of the student without any delay.
Register with top-notch Spatial Analysis Assignment Help service today and get assured perfect grades at budget-friendly prices.
tutorsglobe.com osmotic pressure assignment help-homework help by online osmosis tutors
www.tutorsglobe.com offers answering questions to advantages and disadvantages of international trade, economics assignment help-homework help by online international trade economics tutors
Structure and Classification of Immunoglobulin tutorial all along with the key concepts of Molecular Structure of Antibodies, Classification of Antibodies, Function Relationship of Antibodies
tutorsglobe.com third transition series assignment help-homework help by online d block elements tutors
www.tutorsglobe.com offers example of prototyping homework help, assignment help, case study, writing homework help, online tutoring assistance by computer science tutors.
Reptiles tutorial all along with the key concepts of Features of Reptiles, Lizard, Ecological Adaptation, Different kinds of Lizards and adaptive characteristics of lizard
Hire the best tutors of Britain 1688 revolution Assignment Help service and get assured top-notch grades at reasonable rates.
Polarization of Light tutorial all along with the key concepts of Polarized and Unpolarized Light, Optical Activity, Polarization by Reflection, Polarization by Refraction, Double refraction, birefringence
Subphylum Chelicerata tutorial all along with the key concepts of Subphylum Crustacea, Crustacean characteristics, Crustacean classes, Astacus, Class Malacostraca
In quest for top-class Complex analysis Assignment Help? Hire us and clear all your qualms with apt tutors and secure A++
Avail 100% unique and plagiarism free Constitutional Law Assignment Help service by qualified tutors for grand academic success.
Immunity and Protection tutorial all along with the key concepts of Infection, Examples of Infections, Prevention as a Means of Protection, Non-Specific Resistance, Specific Immune Response to Infection and Cell-mediated Immunity
access chemistry tutorial all along with the key concepts of introduction to chemistry, branches of chemistry, importance of chemistry, how does chemistry affect our lives
tutorsglobe.com causes of cancer assignment help-homework help by online neoplasm tutors
1944284
Questions Asked
3689
Tutors
1483964
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!