The rate at which a consumer will exchange one good for another is called:
A) marginal utility.
B) the marginal rate of transformation.
C) the rate of substitutability.
D) the marginal rate of substitution.

Question

Quizplus · Accepted Answer

The rate at which a consumer will exchange one good for another is known as the marginal rate of substitution. Marginal rate of substitution is the amount of one good that an individual will give up to receive an additional unit of another good, while maintaining the same level of satisfaction. Therefore, choice D, the marginal rate of substitution, is the correct answer.

The Rate at Which a Consumer Will Exchange One Good