In the diagram above, the marginal rate of substitution of X for Y, for a...

Economics

JAMB 2002

In the diagram above, the marginal rate of substitution of X for Y, for a movement from S to T is

A. 13:3
B. 1:5
C. 18:4
D. 5:1

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Correct Answer: Option D

Explanation

To produce 18 units of Y, at point S, 3 units of X was produced at the same point S. A movement along the production chart from point S to T, the firm gave up 5 units of Y to produce 4 units of X. This means that the firm gave up 5 units of product Y to produce 1 additional unit of X.

The ratio of substitution is 5:1

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