If another unit of good X gives a consumer 15 additional units of satisfaction, and another unit of good Y gives 45 additional units of satisfaction, the MRS is equal to one-third.

Question

Quizplus · Accepted Answer

The MRS (Marginal Rate of Substitution) is calculated as the ratio of the additional satisfaction obtained from consuming one more unit of good X to the additional satisfaction obtained from consuming one more unit of good Y.

MRS = (Marginal Utility of X) / (Marginal Utility of Y)

Given that another unit of good X gives 15 additional units of satisfaction and another unit of good Y gives 45 additional units of satisfaction, the MRS is:

MRS = 15 / 45 = 1/3

Therefore, the statement is True.

If Another Unit of Good X Gives a Consumer 15