Use the following to answer questions:
-(Table: Madeline's Preferences for T-Shirts and Coffee) Look at the table Madeline's Preferences for T-Shirts and Coffee. Assume each consumption bundle provides the same level of utility. Suppose Madeline is consuming bundle A but then changes her consumption and slowly moves along her indifference curve to bundles B, C, D, and finally E. As she moves toward bundle E, she gives up:
A) the same number of T-shirts to obtain another cup of coffee.
B) an increasing numbers of T-shirts to obtain another cup of coffee.
C) a decreasing numbers of T-shirts to obtain another cup of coffee.
D) no T-shirts to obtain another cup of coffee.

Question

Use the following to answer questions: 
-(Table: Madeline's Preferences for T-Shirts and Coffee) Look at the table Madeline's Preferences for T-Shirts and Coffee. Assume each consumption bundle provides the same level of utility. Suppose Madeline is consuming bundle A but then changes her consumption and slowly moves along her indifference curve to bundles B, C, D, and finally E. As she moves toward bundle E, she gives up:
A) the same number of T-shirts to obtain another cup of coffee. 
B) an increasing numbers of T-shirts to obtain another cup of coffee. 
C) a decreasing numbers of T-shirts to obtain another cup of coffee. 
D) no T-shirts to obtain another cup of coffee.

Quizplus · Accepted Answer

As Madeline moves along her indifference curve from bundle A to E, she gives up a decreasing number of T-shirts to obtain another cup of coffee, reflecting the diminishing marginal rate of substitution.

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