In: Economics
Consumer purchasing behavior is driven by consumer preferences. The state legislators would like to better understand consumer preferences and the requirements needed to analyze consumer preferences. What does restricting consumer preferences to be transitive mean, and what are the implications of transitivity for consumer indifference curves?
a. What does the Diminishing Marginal Rate of Substitution mean, and what are the implications of a Diminishing Marginal Rate of Substitution for consumer indifference curves?