The slope of the indifference curve between steak and lobster is always equal to the ratio of their prices.

Question

Quizplus · Accepted Answer

The slope of the indifference curve represents the marginal rate of substitution, which is the rate at which a consumer is willing to substitute one good for another while maintaining the same level of utility. It is not necessarily equal to the ratio of their prices, which is the slope of the budget line.

The Slope of the Indifference Curve Between Steak and Lobster