Moving down the indifference curve,the marginal rate of substitution
A) is constant.
B) is rising.
C) diminishes.
D) is highly volatile.
E) depends on household income.

Question

Quizplus · Accepted Answer

The marginal rate of substitution (MRS) is the rate at which a consumer is willing to give up one good in exchange for another while remaining at the same level of utility. As the consumer moves down the indifference curve, they are willing to give up less and less of the first good in exchange for additional units of the second good. This means that the MRS diminishes as they move down the curve. Therefore, the correct answer is (C).

Moving Down the Indifference Curve,the Marginal Rate of Substitution