8. Deriving the marginal rate of substitution ( MRS ) a b Units of good Y Units of good X 26 6 7
9. Deriving the marginal rate of substitution ( MRS ) a b Units of good Y Units of good X 26 6 7 Y = 4 X = 1 MRS = 4
10. Deriving the marginal rate of substitution ( MRS ) a b Units of good Y Units of good X 26 6 7 c d Y = 4 X = 1 Y = 1 X = 1 MRS = 1 MRS = 4 13 14 9
19. A budget line Units of good Y Units of good X a b Units of good X 0 5 10 15 Units of good Y 30 20 10 0 Point on budget line a b Assumptions P X = £2 P Y = £1 Budget = £30
20. Effect of an increase in income on the budget line Units of good Y Units of good X Assumptions P X = £2 P Y = £1 Budget = £40 16 7 m n Budget = £40 Budget = £30
21. Effect on the budget line of a fall in the price of good X Units of good Y Units of good X Assumptions P X = £1 P Y = £1 Budget = £30 B 1 B 2 a b c