Figure 10-4
-Refer to Figure 10-4. What is the marginal rate of substitution between g and h?

Question

Figure 10-4 
-Refer to Figure 10-4. What is the marginal rate of substitution between g and h?

Quizplus · Accepted Answer

The marginal rate of substitution between g and h is the absolute value of the slope of the indifference curve passing through point G on the X-axis and point H on the Y-axis. This slope is dH/dG = (4-2)/(2-1) = 2 cookies. Therefore, the best choice is point B, where the slope of the budget constraint is equal to the marginal rate of substitution.

Figure 10-4 -Refer to Figure 10-4. What Is the Marginal Rate of Marginal