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Marginal Rate of Substitution
#cfa #cfa-level-1 #economics #has-images #microeconomics #reading-14-demand-and-supply-analysis-consumer-demand #section-3-utility-theory #study-session-4

Notice that the convexity implies that at a bundle like a′′, which contains rather a lot of wine and not much bread, the consumer would be willing to give up a considerable amount of wine in exchange for just a little more bread. (The slope of the indifference curve is quite steep at that point.) However, at a point like a′, which contains considerably more bread but less wine than a′′, the consumer is not ready to sacrifice nearly as much wine to obtain a little more bread.
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