The slope of an indifference curve is equal to the ratio of the ____ of the good on the horizontal axis to the ____ of the good on the vertical axis.
A) marginal product (MP); total value (TV)
B) marginal utility (MU); marginal utility (MU)
C) price (P); price (P)
D) total utility (TU); price (P)

Question

Quizplus · Accepted Answer

The slope of an indifference curve represents the rate at which a consumer is willing to trade one good for another while remaining indifferent. This rate is measured by the ratio of the marginal utility of the good on the horizontal axis to the marginal utility of the good on the vertical axis. Therefore, the correct answer is B - the slope of an indifference curve is equal to the ratio of the marginal utility of the good on the horizontal axis to the marginal utility of the good on the vertical axis.

The Slope of an Indifference Curve Is Equal to the Ratio