Only at the point of consumer equilibrium does the marginal rate of substitution (MRS) equal the:
A) slope of the budget line.
B) slope of the indifference curve.
C) price ratio.
D) all of these.

Question

Quizplus · Accepted Answer

At the point of consumer equilibrium, the MRS equals the price ratio, which is the slope of the budget line. It also equals the slope of the indifference curve at that point.

Only at the Point of Consumer Equilibrium Does the Marginal