Stemming from convexity, as we move along an indifference curve, the marginal rate of substitution
A) decreases
B) increases
C) stays constant

Question

Quizplus · Accepted Answer

The marginal rate of substitution (MRS) measures the rate at which a consumer is willing to trade one good for another while remaining indifferent. As we move along an indifference curve, the consumer is giving up more and more of one good to get an additional unit of the other. This means the MRS is decreasing along the curve, reflecting the diminishing marginal utility of each good. Therefore, the best choice is A) decreases.

Stemming from Convexity, as We Move Along an Indifference Curve