The marginal rate of substitution
A) is minus the slope of the indifference curve.
B) can be computed by measuring the curvature of the indifference curve.
C) cannot be deduced from the properties of the indifference curve.
D) can only be computed if we know the prices of all goods.

Question

Quizplus · Accepted Answer

The marginal rate of substitution is defined as the rate at which a consumer is willing to trade off one good for another, while still remaining indifferent (i.e., staying on the same indifference curve). It is measured as the slope of the indifference curve at a given point. Thus, the correct answer is (A) - it is minus the slope of the indifference curve.

The Marginal Rate of Substitution