If an indifference curve is convex, the marginal rate of substitution varies along the curve.

Question

Quizplus · Accepted Answer

When an indifference curve is convex, it means that the marginal rate of substitution (MRS) decreases as we move down along the curve. This implies that the trade-off between the two goods depicted on the indifference curve changes as the consumption bundle changes. Hence, the MRS varies along the curve. When an indifference curve is convex, it means that the marginal rate of substitution (MRS) is diminishing along the curve. This means that as we move along the curve, the consumer is willing to give up less of one good to obtain an extra unit of the other good. Therefore, the MRS varies along the curve.

If an Indifference Curve Is Convex, the Marginal Rate of Substitution