Chapter 11

Question 1

Indifference curve

Answer 1

A line that shows all the consumption bundles that yield the same amount of total utility for an individual

Question 2

Indifference curve map

Answer 2

A collection of indifference curves in which each curve corresponds to a different total utility level

Question 3

Marginal rate of substitution (MRS)

Answer 3

Of good R in place of good M is equal to MUr/MUm, the ratio of the marginal utility of R to the marginal utility of M

Question 4

Diminishing marginal rate of substitution

Answer 4

The more of good R a person cnsumes in proportion to good M, the less M he is willing to substitute for another unit of R

Question 5

Ordinary goods

Answer 5

1. The consumer requires additonal units of R to compensate for less M, and vice versa
2. The consumer experiences a diminishing marginal rate of substitutrion when substituting one good in place of another