The marginal rate of substitution measures
A) the willingness of a consumer to exchange a good with another consumer.
B) the willingness of a consumer to pay the form for a good.
C) the value in dollars of the last unit of good obtained by the consumer.
D) the rate at which a consumer is willing to exchange one good for another.

Question

Quizplus · Accepted Answer

The marginal rate of substitution (MRS) measures the rate at which a consumer is willing to exchange one good for another, while remaining indifferent in terms of utility. It indicates the trade-off a consumer is willing to make between two goods, and it helps to determine the optimal consumption bundle that maximizes the consumer's utility.

The Marginal Rate of Substitution Measures