Figure 3.1.4
-Refer to Figure 3.1.4 above. When computing the marginal rate of substitution from point to point as we move downward across the curve, we discover:
A) a diminishing marginal rate of substitution.
B) an ever increasing marginal rate of substitution.
C) a constant marginal rate of substitution.
D) no particular trend in the marginal rate of substitution.

Question

Figure 3.1.4
-Refer to Figure 3.1.4 above. When computing the marginal rate of substitution from point to point as we move downward across the curve, we discover:
A) a diminishing marginal rate of substitution. 
B) an ever increasing marginal rate of substitution. 
C) a constant marginal rate of substitution. 
D) no particular trend in the marginal rate of substitution.

Quizplus · Accepted Answer

As we move downward across the curve, the marginal rate of substitution decreases, indicating a diminishing marginal rate of substitution. This is because as more of one good is consumed, the additional satisfaction gained from consuming an additional unit of that good decreases, and the consumer must consume a greater quantity of the other good to gain the same level of satisfaction.

Figure 3.1.4 -Refer to Figure 3.1.4 Above. When Computing the Marginal Rate