Assume that the quantity of apples is measured on the horizontal axis and the quantity of oranges is measured on the vertical axis.If Andy likes both apples and oranges,then his Marginal Rate of Substitution along the indifference curve indicates
A)how many oranges he is willing to give up in order to obtain one more apple.
B)how many additional oranges he wants in order to give up two apples.
C)how many oranges he is willing to give up in order to get rid of one apple.
D)how many apples he is willing to give up in order to get rid of one orange.

Question

Quizplus · Accepted Answer

The Marginal Rate of Substitution (MRS) measures the rate at which a consumer is willing to substitute one good for another while remaining indifferent. Hence, if Andy's MRS along the indifference curve is -2, then he is willing to give up two oranges to obtain one more apple. Therefore, the correct choice is A.

Assume That the Quantity of Apples Is Measured on the Horizontal