The marginal rate of substitution is defined as
A)the feasible rate of substitution given prices.
B)the amount of good Y that a consumer is willing to substitute for good X and stay at a given level of satisfaction.
C)the slope of the utility function.
D)the convexity of the indifference curve.
E)the amount of good Y substituted for good X by a consumer.

Question

Quizplus · Accepted Answer

The marginal rate of substitution (MRS) is the willingness of a consumer to exchange one good for another while remaining at the same level of utility. It is the amount of good Y that a consumer is willing to substitute for good X and stay at a given level of satisfaction, which is the definition given in choice B. Choices A, C, D, and E are not accurate definitions of the MRS.

The Marginal Rate of Substitution Is Defined as