The marginal rate of substitution is
A) the rate at which the consumer will give up one good to get an additional unit of another good while remaining on the same indifference curve.
B) the rate at which utility increases as the consumer increases purchases of a good, holding purchases of the other good constant.
C) the rate at which a consumer will exchange a good for income holding prices constant.
D) None of the above answers is correct.

Question

Quizplus · Accepted Answer

The marginal rate of substitution (MRS) is the rate at which a consumer is willing to give up one good to obtain an additional unit of another good while remaining on the same level of utility (indifference curve). In other words, it represents the amount of one good that a consumer is willing to forego in order to obtain an extra unit of the other good.

The Marginal Rate of Substitution Is