Figure 10-4

-Refer to Figure 10-4.What is the marginal rate of substitution for one bar of chocolate between g and h?

Question

Figure 10-4
 
-Refer to Figure 10-4.What is the marginal rate of substitution for one bar of chocolate between g and h?

Quizplus · Accepted Answer

The marginal rate of substitution between g and h is the amount of cookies that a person is willing to give up for one more bar of chocolate. From point g to point h, the person is willing to give up 1/2 of a cookie for one more bar of chocolate. Therefore, the best choice would be to consume another bar of chocolate and give up 1/2 of a cookie.

Figure 10-4 -Refer to Figure 10-4.What Is the Marginal Rate of Substitution