If Fred's marginal rate of substitution of salad for pizza equals five,then
A)he would give up five pizzas to get the next salad.
B)he would give up five salads to get the next pizza.
C)he will eat five times as much pizza as salad.
D)he will eat five times as much salad as pizza.

Question

Quizplus · Accepted Answer

The marginal rate of substitution (MRS) represents the maximum amount of one good that a consumer is willing to give up in order to obtain an additional unit of another good while remaining equally satisfied. In this case, Fred's MRS of salad for pizza is five, which means he is willing to give up five salads to obtain the next pizza. Therefore, the correct answer is B.

If Fred's Marginal Rate of Substitution of Salad for Pizza