Refer to the above table. The table gives the various combinations of Good A and Good B along Jane's indifference curve. The marginal rate of substitution when Jane goes from combination B to combination C is
A) 4:1.
B) 3:1.
C) 2:1.
D) 0.

Question

Quizplus · Accepted Answer

The marginal rate of substitution when Jane goes from combination B to C is 3:1, which means she is willing to give up 3 units of Good A to get 1 more unit of Good B and still remain on the same indifference curve. Therefore, the best choice for Jane would be to move from B to C to increase her satisfaction while keeping her total spending the same.

Refer to the Above Table