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

Question

Quizplus · Accepted Answer

The property of diminishing marginal rate of substitution means that as a consumer substitutes one good for another along an indifference curve, the marginal rate of substitution between the two goods decreases. This implies that the slope of the indifference curve becomes flatter as we move down along it. Therefore, indifference curves must be bowed in toward the origin, which is the characteristic feature of diminishing marginal rate of substitution.

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