Refer to the accompanying figure.
From the figure, we can infer that James' marginal rate of substitution is:
A)the same at point A and point B.
B)higher at point B than point A.
C)higher at point A than point B.
D)constant.

Question

Refer to the accompanying figure.  
 From the figure, we can infer that James' marginal rate of substitution is:
A)the same at point A and point B. 
B)higher at point B than point A. 
C)higher at point A than point B. 
D)constant.

Quizplus · Accepted Answer

The slope of BC1 is greater than the slope of BC2, so the marginal rate of substitution at point A must be greater than the marginal rate of substitution at point B.

Refer to the Accompanying Figure