Figure 10-4
-Refer to Figure 10-4.What is the marginal rate of substitution between h and j?

Question

Figure 10-4 
-Refer to Figure 10-4.What is the marginal rate of substitution between h and j?

Quizplus · Accepted Answer

The best choice would be to consume more of good j (horizontal axis) and less of good h (vertical axis) until the consumer reaches a point where the marginal rate of substitution (MRS) equals the slope of the budget line. In this case, it appears that the MRS between h and j falls between 2 and 4 cookies per unit. Choice B represents a combination that is on the budget line and which provides the highest level of utility for this consumer.

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