Term
Marginal Rate of Substitution (MRS) 

Definition
The rate at which a consumer is willing to substitute one good for another good and still maintain the same level of satisfaction. 


Term
Marginal Rate of Substitution for X with Y (MRSxy)(Definition) 

Definition
The amount of Y a person is willing to give up to get one more unit of X. 


Term
Marginal Rate of Substitution for X with Y (MRSxy)(Formula) 

Definition


Term
Diminishing Marginal Utility 

Definition
As a person gains more units of a good, the value of each new unit is lower than the one before 


Term
Four Assumptions of Indifference Curve Analysis 

Definition
Completeness More Is Better Diminishing Marginal Rate of Substitution Transitivity 


Term

Definition
U = f(X, Y) where X is the amount of good X that you consume, and Y is the amount of good Y that you consume 


Term
Change in Utility (Formula) 

Definition


Term

Definition


Term
The Market Rate of Substitution 

Definition
The rate at which one good can be exchanged for another at current market prices. 


Term
The Market Rate of Substitution for X with Y (Description) 

Definition
The amount of Y which must be given up in order to get one more unit of X, given a fixed budget and market prices. 


Term
The Market Rate of Substitution for X with Y (Formula) 

Definition


Term
Utility Maximizing Condition 

Definition

