The property of diminishing marginal rate of substitution follows from the property that the indifference curve is
A) downward sloping.
B) upward sloping.
C) bowed in toward the origin.
D) bowed out from the origin.
E) concave from the origin.

Question

Quizplus · Accepted Answer

The property of diminishing marginal rate of substitution means that the rate at which a consumer is willing to trade one good for another decreases as they obtain more of one good. This property is reflected in the shape of the indifference curve, which is bowed in toward the origin. This is because as the consumer obtains more of one good, they are willing to trade less and less of it for the other good, resulting in a flatter slope of the indifference curve.

The Property of Diminishing Marginal Rate of Substitution Follows from the Property