The rate at which a consumer is willing to trade one good for the other depends on the amounts of the goods he is already consuming.

Question

Quizplus · Accepted Answer

This statement is true according to the law of diminishing marginal utility. As the consumer consumes more and more of one good, the marginal utility of that good decreases and the consumer becomes willing to trade it for more units of the other good.

The Rate at Which a Consumer Is Willing to Trade