The curvature of the isoutility curve illustrates:
A) a diminishing marginal rate of substitution between wages and job safety.
B) the law of diminishing marginal returns applied to wages.
C) the diminishing marginal rate of technical substitution between wages and job safety.
D) a diminishing marginal rate of transformation between wages and job safety.
E) the amount of safety that can be exchanged for wages on the labour market.

Question

Quizplus · Accepted Answer

The curvature of the isoutility curve reflects a diminishing marginal rate of substitution, indicating that as one moves along the curve, the willingness to trade off wages for job safety decreases, consistent with the principle of diminishing marginal utility.

The Curvature of the Isoutility Curve Illustrates