Figure 10-3
-Refer to Figure 10-3.What is the marginal rate of substitution between g and h?

Question

Figure 10-3 
-Refer to Figure 10-3.What is the marginal rate of substitution between g and h?

Quizplus · Accepted Answer

The marginal rate of substitution (MRS) is the amount of one good that a consumer is willing to give up to obtain one additional unit of another good while remaining at the same level of utility. In this case, the consumer is willing to give up 2 cookies (from point A) to obtain one additional cup of coffee (reaching point B). Therefore, the marginal rate of substitution between g (coffee) and h (cookies) is 2 cookies per cup of coffee. The best choice for the consumer depends on their preferences and budget constraints, which cannot be determined from the given information.

Figure 10-3 -Refer to Figure 10-3.What Is the Marginal Rate of Substitution