The marginal rate of substitution is equal to the
A) slope of the demand curve.
B) marginal cost of each good.
C) magnitude of the slope of the indifference curve.
D) relative prices of the two goods.

Question

Quizplus · Accepted Answer

The marginal rate of substitution (MRS) measures how much of one good a consumer is willing to give up in order to obtain an additional unit of another good while remaining indifferent between the two. This is measured by the slope of the indifference curve at a point. Therefore, the correct answer is C, the magnitude of the slope of the indifference curve. Choices A, B, and D are incorrect because they do not accurately describe the concept of MRS.

The Marginal Rate of Substitution Is Equal to the