Exhibit 6A-7 Consumer equilibrium

-As shown in Exhibit 6A-7, the marginal rate of substitution (MRS) at point B is ____ the marginal rate of substitution at point A.
A) less than
B) greater than
C) equal to
D) twice

Question

Exhibit 6A-7 Consumer equilibrium
​ 
-As shown in Exhibit 6A-7, the marginal rate of substitution (MRS) at point B is ____ the marginal rate of substitution at point A.
A) less than 
B) greater than 
C) equal to 
D) twice

Quizplus · Accepted Answer

The slope of the indifference curve at point B is steeper than the slope of the indifference curve at point A, indicating that the consumer is willing to give up more of good Y to obtain an additional unit of good X at point B than at point A. Therefore, the MRS at point B is greater than the MRS at point A.

Exhibit 6A-7 Consumer Equilibrium