The property of diminishing marginal rate of substitution follows from the property that the indifference curves are
A) downward sloping.
B) upward sloping.
C) bowed in toward the origin.
D) bowed out from the origin.
E) negatively sloped.

Question

Quizplus · Accepted Answer

The property of diminishing marginal rate of substitution implies that as a consumer substitutes one good for another, holding utility constant, the rate at which he is willing to substitute decreases over time. This occurs because indifference curves are bowed in toward the origin, reflecting the fact that consumers are willing to give up larger quantities of one good as they acquire more of the other good, but at a decreasing rate.

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