Along a standard, downward sloping, convex indifference curve the marginal rate of substitution is:
A)constant.
B)decreasing.
C)positive.
D)increasing.

Question

Quizplus · Accepted Answer

The marginal rate of substitution (MRS) decreases along a standard, downward sloping, convex indifference curve because as a consumer substitutes one good for another, the amount of the good being given up that the consumer is willing to trade for an additional unit of the other good decreases. This reflects diminishing marginal utility.

Along a Standard, Downward Sloping, Convex Indifference Curve the Marginal