The marginal rate of substitution is:
A) the total amount a consumer is willing to trade to get another good.
B) the rate at which the consumer is willing to trade one good to gain one more unit of another good.
C) is reflected by the slope of the indifference curve.
D) characterized by both b. and c.

Question

Quizplus · Accepted Answer

The marginal rate of substitution (MRS) is the rate at which a consumer is willing to trade one good for another. Therefore, option B is correct. The MRS is reflected in the slope of the indifference curve since the slope indicates the rate at which the consumer is willing to trade one good for another. Therefore, option C is also correct. As a result, the correct answer is option D, which includes both B and C.

The Marginal Rate of Substitution Is