When indifference curves have ________ marginal rates of substitution,any interior choice that satisfies the tangency condition is the best affordable choice.
A) Constant
B) Increasing
C) Declining
D) Positive

Question

Quizplus · Accepted Answer

Indifference curves with declining marginal rates of substitution imply that as a consumer substitutes one good for another, the rate at which they are willing to make that substitution decreases. This characteristic ensures that the tangency condition (where the budget line is tangent to the indifference curve) represents the optimal consumption bundle.

When Indifference Curves Have ________ Marginal Rates of Substitution,any Interior