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 utility (MU); marginal utility (MU)
B) total utility (TU); total utility (TU)
C) marginal product (MP); marginal product (MP)
D) price (P); total utility (TU)

Question

Quizplus · Accepted Answer

The slope of an indifference curve represents the rate at which a consumer is willing to substitute one good for another while maintaining the same level of utility. This rate of substitution is equal to the ratio of the marginal utilities of the two goods. Therefore, the answer is A, where the slope equals MU of the good on the horizontal axis divided by MU of the good on the vertical axis.

The Slope of an Indifference Curve Is Equal to the Ratio