The marginal rate of substitution indicates
A)how much of one good a consumer is willing to give up to get one more unit of another good while remaining equally satisfied
B)how much of a good a consumer can receive for $1 while remaining equally satisfied
C)the tendency of a consumer to substitute lower-priced goods for a good whose price has increased
D)the limits of utility analysis
E)the basis of consumer surplus

Question

Quizplus · Accepted Answer

The marginal rate of substitution (MRS) indicates how much of one good a consumer is willing to give up to get one more unit of another good while remaining equally satisfied. It shows the rate at which a consumer is willing to trade off one good for another, while achieving the same level of utility or satisfaction.

The Marginal Rate of Substitution Indicates