The marginal rate of substitution is also known as the slope of the budget constraint.

Question

Quizplus · Accepted Answer

The marginal rate of substitution (MRS) is the rate at which a consumer can give up some amount of one good in exchange for another good while maintaining the same level of utility. It is represented by the slope of the indifference curve, not the budget constraint. The slope of the budget constraint represents the ratio of the prices of the two goods.

The Marginal Rate of Substitution Is Also Known as the Slope