
	Where results make sense

Topic: Marginal rate of substitution

Related Topics

Consumer theory

Utility

Marginal utility

Preference

Opportunity cost

Microeconomics

Behavioral finance

Indifference curve

In the News (Fri 17 Feb 12)

EXECUTIVE POWER

Iran

ANALYSIS

Pakistan

Family compact

	Production theory basics - Wikipedia, the free encyclopedia
		The marginal physical product of a variable input is the change in total output due to a one unit change in the variable input (called the discrete marginal product) or alternatively the rate of change in total output due to an infinitesimally small change in the variable input (called the continuous marginal product).
		The marginal rate of technical substitution of labour for capital is equivalent to the absolute slope of the isoquant at that point (change in capital divided by change in labour).
		In this case we are looking at the marginal rate of technical substitution capital for labour (which is the reciprocal of the marginal rate of technical substitution labour for capital).
	en.wikipedia.org /wiki/Production_theory_basics (2112 words)

	Marginal concepts - Wikipedia, the free encyclopedia
		Marginal benefit is the extra utility accrued from one additional unit of a good.
		Similarly marginal utility is the additional utility (satisfaction or benefit) that a consumer derives from an additional unit of a commodity or service.
		It is assumed that marginal utility generally falls as consumption increases, so that one's 10th doughnut in a day is less satisfying than the first or second.
	en.wikipedia.org /wiki/Marginal_concepts (176 words)

	Rate
		Environmental lapse rate The environmental lapse rate is the rate of decrease of air radiosonde.
		Glomerular filtration rate Glomerular filtration rate or GFR is the volume of fluid filtered from the renal glomerular c...
		Rate of exploitation The "rate of exploitation" is a concept in surplus-value) to the total amount of wages paid (the va...
	www.brainyencyclopedia.com /topics/rate.html (1547 words)

	Marginal rate of substitution - Wikipedia, the free encyclopedia
		In economics, the marginal rate of substitution (MRS for short) is the rate at which consumers are willing to give up units of one good in exchange for more units of another good.
		Mathematically, the MRS is the negative slope or derivative (evaluated at a point) of the indifference curve.
		The marginal rate of substitution of good X for good Y (MRSxy) is also equivalent to the marginal utility of X over the marginal utility of Y. Formally,
	en.wikipedia.org /wiki/Marginal_rate_of_substitution (398 words)

	Preference 9 (Site not responding. Last check: 2007-10-28)
		The term is the "marginal rate of substitution." What we have just seen is that, at 1 wing and 15 fries, the slope of the indifference curve is 10 -- meaning the consumer would give up only one-tenth of a wing to get one more fry.
		The marginal rate of substitution between two goods is (minus) the slope of an indifference curve for the two goods.
		This "law" of decreasing marginal rate of substitution brings to mind the "laws" of diminishing marginal benefit and marginal utility.
	william-king.www.drexel.edu /top/prin/txt/MUch/pref9.html (388 words)

	[No title] (Site not responding. Last check: 2007-10-28)
		Marginal utility of A will be lower and marginal utility of B higher in first case d.
		Marginal rate of substitution how much of one good you are willing to give up to get one more unit of another good c.
		Principle of diminishing marginal rate of substitution - the more you have of one good and the less you have of another, the more of the first you are willing to give up to get another unit of the second 5.
	econ.bu.edu /lang/ec101/oct11.txt (829 words)

	KSU Economics: Sadia Mariam Malik (Site not responding. Last check: 2007-10-28)
		The marginal utility of a good say X is defined to be the amount of additional utility derived from the consumption of an additional unit of X while keeping the quantity of the other good say Y as constant.
		For instance the marginal rate of substitution of Y for X is the amount of Y that a consumer is willing to give up in order to get one additional unit of X. The marginal rate of substitution is in fact the slope of the indifference curve.
		Since the slope of the IC is simply the marginal rate of substitution of X for Y, therefore we can say that the marginal rate of substitution of X for Y declines as we move along the curve.
	www.k-state.edu /economics/malik/lect6sp01.html (610 words)

	Labor economics Article, Laboreconomics Information
		Theparticipation rate is the number of people in the labour force divided by the size of the adult population (orby the population of working age).The unemployment level is defined as the labour forceminus the number of people currently employed.
		Thepoint of optimization (point A) reflects the equivalency between the wage rate and the marginal rate of substitution, leisure for income(the slope of the indifference curve).
		This substitution effect is represented bythe shift from point C to point B. The net impact of these two effects is shown by the shift from point A to point B. Therelative magnitude of the two effects depends on the circumstances.
	www.anoca.org /labour/supply/labor_economics.html (2460 words)

	EcoGloss -- Glossary of terms used in economics (M-Q)
		Marginal social cost is the cost of producing one additional unit of output, including the costs borne by the producer and any other costs indirectly incurred by any other member of society; the marginal cost incurred by the producer of a good together with the marginal cost imposed as an externality on others.
		Marginal utility is the change in total utility resulting from a one-unit increase in the quantity of a good consumed.
		Marginal utility per dollar spent is the marginal utility obtained from the last unit of a good consumed divided by the price of the good.
	academics.vmi.edu /econ/gg/ecogloss/mq.htm (5404 words)

	Marginal Rate of Time Preference (Site not responding. Last check: 2007-10-28)
		Technically, the MRTP is equal to the marginal rate of substitution between present and future consumption when it is equal to the rate of return on savings.
		Technically, this is the marginal rate of transformation between present and future consumption or the slope of the production possibilities frontier.
		With perfect capital markets, the marginal rate of time preference is equated to the marginal rate of transformation with the market interest rate and consumption (and utility) increases.
	core.ecu.edu /econ/whiteheadj/5000/ch05/perfect.htm (210 words)

	Encyclopedia: Marginal rate of substitution
		In microeconomics, an indifference curve is a graph showing combinations of two goods to which an economic agent (such as a consumer or firm) is indifferent, that is, it has no preference for one combination over the other.
		In economics, marginal utility is the additional utility (satisfaction or benefit) that a consumer derives from an additional unit of a commodity or service.
		In economics, marginal concepts refer to the effect of producing or consuming one more of a good, i.
	www.nationmaster.com /encyclopedia/Marginal-rate-of-substitution (631 words)

	Bank of England Quarterly Bulletin: Asset price based estimates of sterling exchange rate risk premia (Site not responding. Last check: 2007-10-28)
		Within intertemporal utility optimisation models, the foreign exchange rate risk premium equals the conditional covariance between the future exchange rate change and the future marginal rate of substitution of the representative investor.
		In conventional models the marginal rate of substitution equals a linear function of future consumption growth, which is often proxied by the future real return on a stock market portfolio.
		We combine the resulting conditional estimates of the marginal rate of substitution for the global investor with the covariance between the relative change in a particular sterling rate and the real return on a 'world' stock portfolio to proxy the risk premium in the effective sterling exchange rate, the sterling/DM rale and the sterling/dollar rate.
	findarticles.com /p/articles/mi_qa3774/is_200504/ai_n13510644 (638 words)

	[No title] (Site not responding. Last check: 2007-10-28)
		ab} \pard \s2\fi-720\li1440\sl0\tx720\tx1440 {\\pn \pnlvl2\pnlcltr\pnstart1\pnindent720\pnhang{\pntxta.}} {\plain Marginal* rate of substitution \'96 how much of one good you are willing to give up to get one more unit of another good\par }{\pntext\pard c.
		ab} \pard \s2\fi-720\li1440\sl0\tx720\tx1440 {\\pn \pnlvl2\pnlcltr\pnstart1\pnindent720\pnhang{\pntxta.}} {\plain Principle of diminishing marginal* rate of substitution \_ the more you have of one good and the less you have of another, the more of the first you are willing to give up to get another unit of the second\par }{\pntext\pard 5.
		ab} \pard \s2\fi-720\li1440\sl0\tx720\tx1440 {\\pn \pnlvl2\pnlcltr\pnstart1\pnindent720\pnhang{\pntxta.}} {\plain This is an example of diminishing marginal* rate of substitution\par }{\pntext\pard 14.
	econ.bu.edu /lang/ec101/oct11.doc (1875 words)

	[No title]
		Give an expression for the consumerÕs marginal rate of substitution in consumption of other goods for foods--that is, the slope of the consumerÕs indifference curve with food (q1) on the vertical axis and other goods (q2) on the horizontal axis.
		Give an expression for the railroadÕs marginal rate of substitution in production (also called the Òtechnical rate of substitutionÓ) of workers for forklifts(that is, the slope of the railroadÕs isoquant with forklifts (x1) on the vertical axis and workers (x2) on the horizontal axis.
		Find an expression for LarryÕs marginal rate of substitution of leisure for consumption(that is, the slope of LarryÕs indifference curve with leisure on the horizontal axis and consumption on the vertical axis.
	www.drake.edu /cbpa/econ/boal/173/99spring/99fin.doc (1754 words)

	Indifference Curve Analysis [Virtual Learning Arcade] (Site not responding. Last check: 2007-10-28)
		This is due to the concept of the diminishing marginal rate of substitution between the two goods.
		The reason why the marginal rate of substitution diminishes is due to the principle of diminishing marginal utility.
		The substitution effect is when the consumer switches consumption patterns due to the price change alone but remains on the same indifference curve.
	www.bized.ac.uk /virtual/vla/theories/indifference_curve.htm (1205 words)

	eh10.html (Site not responding. Last check: 2007-10-28)
		If the two inputs are perfect substitutes everywhere in the sense that one unit of one input can always be substituted with one unit of the other input, then we have a technology which we call perfect 1:1 substitutes.
		This is shown by the fact that the slopes of the isoquants are constant - equal to 1 in the case of 1:1 substitutes and equal to 2 in the case of 1:2 substitutes.
		The Marginal Rate of Substitution measures the slope of an isoquant.
	www-users.york.ac.uk /~jdh1/micro2/handouts/eh101.html (1324 words)

	Supply and Demand
		For this efficiency condition to be met, the marginal rate of substitution between any two goods must be the same for all consumers.
		For example, suppose that at the margin you think that one apple is worth three scoops of ice cream, and I think that one apple is worth one scoop of ice cream.
		Suppose that the marginal rate of substitution in consumption is that one apple is worth two scoops of ice cream.
	arnoldkling.com /econ/markets/efficiency.html (2684 words)

	MARGINAL RATE OF TECHNICAL SUBSTITUTION (Site not responding. Last check: 2007-10-28)
		the rate at which one input is substituted for another along an isoquant.
		Thus, the rate of change of input Y with respect to X --- that is, the rate at which Y may be substituted for X in the production process --- is given by the slope of the curve relating Y to X. This is the slope of the isoquant.
		Since the slope is negative and the objective here is to express the substitution rate as a positive quantity, a negative sign is attached to the slope (a convenience factor).
	www.nkd-group.com /users/ghdash/Classrooms/fin660/melec07/melec7_2p24.htm (254 words)

	[No title] (Site not responding. Last check: 2007-10-28)
		Marginal utility of A will be lower and marginal utility of B higher in first case
		Marginal rate of substitution - how much of one good you are willing to give up to get one more unit of another good
		Principle of diminishing marginal rate of substitution - the more you have of one good and the less you have of another, the more of the first you are willing to give up to get another unit of the second
	econ.bu.edu /lang/ec101/oct11.htm (723 words)

	EcoGloss -- Glossary of terms used in economics (A-D) (Site not responding. Last check: 2007-10-28)
		In this system of fixed exchange rates, the goal was for each country's central bank to intervene in the foreign exchange market to prevent their currency from trading outside a particular band.
		The general tendency for the marginal rate of substitution of one good for another to diminish as a consumer moves along an indifference curve increasing consumption of the first good.
		marginal product of an additional resource eventually to be less than the marginal product of the previous unit of the resource.
	academics.vmi.edu /econ/gg/ecogloss/ad.htm (4558 words)

	Key Concepts (Site not responding. Last check: 2007-10-28)
		The ratio of the marginal utility of leisure to the marginal utility of consumption, which is also the absolute value of the slope of an indifference curve.
		Thus, because the two woods have similar construction properties, a foot of red wood timber could be substituted for oak timber at a constant rate of one to one.
		This state occurs when the value of marginal product of a given type of labor is the same in all its potential uses and is equal to its opportunity cost (the price of this type of labor).
	www.mhhe.com /economics/borjas/key01.mhtml (2203 words)

	Articles - Indifference curve (Site not responding. Last check: 2007-10-28)
		The slope of an indifference curve, known by economists as the marginal rate of substitution, shows the rate at which consumers are willing to give up one good in exchange for more of the other good.
		The curves are convex to the origin indicating a diminishing marginal rate of substitution.
		The marginal rate of substitution is either zero or infinite.
	www.zgrey.com /articles/Indifference_curve (752 words)

	[No title] (Site not responding. Last check: 2007-10-28)
		This note investigates the conditions under which the marginal rate of substitution is decreasing, as hypothesized in the text.
		That is, the marginal rate of substitution is equal to the ratio of the marginal utilities.
		We are left with the uneasy conclusion that diminishing marginal utility is neither a sufficient nor a necessary condition for a diminishing marginal rate of substitution (convex indifference curves) and we must therefore simply state this as an assumption, albeit a reasonable one: The MRS between any pair of goods X and Y is diminishing.
	www.mhhe.com /economics/mcconnell15e/graphics/mcconnell15eco/common/dothemath/marginalrateofsubstitution.html (631 words)

	The Marginal Rate of Substitution (Site not responding. Last check: 2007-10-28)
		The slope at any point on an indifference curve is the marginal rate of substitution.
		It is the rate at which a consumer is willing to substitute one good for another.
		It is the amount of one good that a consumer requires as compensation to give up one unit of the other good.
	www.cameron.edu /~abduls/ECONII%20ONL/MNKPPT/chap_21/sld015.htm (53 words)

	Examples and exercises on isoquants and the marginal rate of technical substitution (Site not responding. Last check: 2007-10-28)
		Examples and exercises on isoquants and the marginal rate of technical substitition
		In each technique there is no possibility of substituting one input for another, but various mixes of the two techniques may be used by the firm.
		Marginal rate of technical substitution when the inputs are perfect substitutes
	www.chass.utoronto.ca /~osborne/2x3/tutorial/ISOQEX.HTM (577 words)

	Product-Mix Efficiency
		Only when the marginal rate of transformation of each product is equal to the marginal rate of substitution, that is, when "trading with nature" has the same "price" as trading with people, will the economy be economically efficient.
		It might also change the marginal rate of substitution (the slope of the budget line).
		Here, the marginal rate of transformation equals the marginal rate of substitution and this point is economically efficient.
	www.saintjoe.edu /~bobs/econ/Efficiency/ProdMix.html (713 words)

	Econ 310 (Site not responding. Last check: 2007-10-28)
		The concept of marginal utility refers to the amount of increase (or decrease) in total utility that derives from consuming another unit of some particular good or service.
		Overeating is perhaps one of the most universal experiences we have of the concept of diminishing marginal utility, meaning that the marginal utility of each additional unit consumed is smaller than the preceding unit.
		The marginal rate of subsitution (MRS) refers to the slope of the indifference curve.
	www.humboldt.edu /~microeco/danalysis.htm (3602 words)

	A Glossary of Microeconomic Terms (Site not responding. Last check: 2007-10-28)
		Diminishing Marginal Utility (DMU)--An economic concept that refers to the notion that additional units consumed of a particular commodity provide less and less additional satisfaction relative to previous units consumed.
		Marginal Rate of Substitution--The rate by which a consumer may substitute a quantity of one good for another holding his/her level of utility constant.
		Substitute Goods--A pair of goods where the quantity demanded of one increases when the price of a related good also increases.
	www.digitaleconomist.com /glossary_micro.html (1718 words)

	Consumer theory (Site not responding. Last check: 2007-10-28)
		Good X is an inferior good since the amount bought decreased as the income increases.
		The substitution effect is basically a price change that changes the slope of the budget constraint, but leaves the consumer on the same indifference curve.
		This effect will always cause the consumer to substitute away from the good that is becoming comparatively more expensive.
	hallencyclopedia.com /Consumer_theory (847 words)

Try your search on: Qwika (all wikis)