Question

Michael eats hamburgers and smores. If Michael eats two hamburgers and one smore, he would give up half hamburger in order to eat one smore more (his welfare remaining constant). When he eats smores, he wants more and more. Indeed, he would give up one hamburger more for eating his third smore (his welfare remaining constant). Because of this, we can say that Michael’s MRS of smores for hamburgers is not decreasing.True / False.

Answer 1

Answer:True it is not decreasing

Explanation:The marginal rate of substitution (MRS) refers to number of goods that one is willing to consume when compared to the other good , as long as this goods also result bro the same satisfaction. Michael is willing to consume more smores in place of hamburgers ,he can substitute a hamburger at any time just to have more smores so his MRS of smores ifpr hamburgers is increasing