If Fred's marginal rate of substitution of salad for pizza equals 5,then
A) he would give up 5 pizzas to get the next salad.
B) he would give up 5 salads to get the next pizza.
C) he will eat five times as much pizza as salad.
D) he will eat five times as much salad as pizza.

Question

Quizplus · Accepted Answer

Marginal rate of substitution (MRS) is the rate at which a consumer is willing to exchange one good for another while maintaining the same level of satisfaction. In this case, Fred's MRS of salad for pizza is 5, which means he is willing to give up 5 salads to get the next pizza slice. This is choice B.

If Fred's Marginal Rate of Substitution of Salad for Pizza