c ndifference Curves exhibit diminishing marginal rates of substitution

c This assumption assures that indifference curves are smooth and convex to the origin.
c This assumption also set the stage for using techniques of constrained optimization. Because the
shape of the curve assures that the first derivative is negative and the second is positive.
c The MRS tells how much y a person is willing to sacrifice to get one more unit of x.
c This is also called the substitution assumption. This is the most critical assumption of consumer
theory. Consumers are willing to give up or trade-off some of one good to get more of another.
The fundamental assertion is that there is a maximum amount that "a consumer will give up of
one commodity to get one unit of other good is that amount which will leave the consumer
indifferent between the new and old situations"[12] The negative slope of the indifference curves
[13]
represents the willingness of the consumer to make a trade off.

c There are also many sub-assumptions:

c Irreflexivity - for no x is xpx
c negative transivity if xpy then for any third commodity z, either xpz or zpy or both.