The marginal rate of substitution is equal to the magnitude of the
A) slope of the demand curve.
B) price of the good measured along the x-axis.
C) slope of the indifference curve.
D) relative prices of the two goods.
E) price of the good measured along the y-axis.

Question

Quizplus · Accepted Answer

The marginal rate of substitution (MRS) measures the rate at which a consumer is willing to substitute one good for another while maintaining the same level of utility. It is equal to the slope of the indifference curve, which shows all possible combinations of two goods that provide the same level of satisfaction. The other options are not directly related to the concept of MRS.

The Marginal Rate of Substitution Is Equal to the Magnitude