Moving along an indifference curve,if a consumer requires a small amount of the good measured along the y-axis to make up for one unit less of the good measured on the x-axis,then
A) total utility is increasing.
B) the marginal rate of substitution is low and the indifference curve is flat.
C) the marginal rate of substitution is low and the indifference curve is steep.
D) the marginal rate of substitution is high and the indifference curve is steep.
E) the marginal rate of substitution is high and the indifference curve is flat.

Question

Quizplus · Accepted Answer

The marginal rate of substitution (MRS) is low when a consumer requires only a small amount of one good to substitute for a decrease in another, resulting in a flatter indifference curve. This reflects a lower willingness to trade between the two goods.

Moving Along an Indifference Curve,if a Consumer Requires a Small