Max consumes only yogurt and almonds,and he is on his highest possible indifference curve.Bundle A (4 yogurts and 2 almonds)and bundle B (3 yogurts and 3 almonds)are on this indifference curve.Between points A and B,what is Max's marginal rate of substitution of yogurt for almonds?
A)1
B)2
C)3
D)1.33

Question

Quizplus · Accepted Answer

The marginal rate of substitution (MRS) is the rate at which a consumer can give up some amount of one good in exchange for another good while maintaining the same level of utility. In this case, moving from bundle A to bundle B, Max gives up 1 yogurt to gain 1 additional almond, making the MRS of yogurt for almonds 1:1.

Max Consumes Only Yogurt and Almonds,and He Is on His