The marginal rate of substitution is
A)the slope of the utility curve.
B)the slope of the contract curve.
C)the slope of the utility possibilities curve.
D)none of the above.

Question

Quizplus · Accepted Answer

The marginal rate of substitution (MRS) is the rate at which a consumer can substitute one good for another while maintaining the same level of utility. This is reflected in the slope of the indifference curve, which is the utility curve representing all combinations of two goods that provide the same level of satisfaction or utility to the consumer. Therefore, the correct answer is A.

The Marginal Rate of Substitution Is