Explain the concept of(MRS) with the help of a numerical example . Alsoexplain its behaviour along the Indifference Curve.

Explain the concept of(MRS) with the help of a numerical example . Als

1.	Explain the concept of(MRS) with the help of a numerical example . Alsoexplain its behaviour along the Indifference Curve.
Answer» Solution :Marginal Rate of Substitution (MRS) MEANS the rate at which a consumer is willing to sacrifice QUANTITY ofone good to obtain one more unit of the other good. Let the two goods consumed be A and B . Suppose the following combinations of these two goods have same utility level for him : `{:("Good A","Good B","MRS"),(""1,""8,""-),(""2,""4," "4B:1A),(""3,""1," "3B:1A):}` The consumer is willing to sacrifice 4B to obtain second unitof A. Forthe third unit of A, he iswilling to sacrifice LESS because marginal utility of A decreases as he consumes more ofA.