Ask Question
11 August, 15:46

The marginal rate of substitution

a. varies along an indifference curve if the curve is bowed inward.

b. is constant along an indifference curve if the curve is a straight line.

c. is greater when a consumer has more of two goods rather than less of two goods.

d. Both a and b are correct. g

+5
Answers (1)
  1. 11 August, 19:18
    0
    The answer is: D) Both a and b are correct.

    Explanation:

    The marginal rate of substitution (MRS) measures the units of good A that a consumer is willing to give up for another unit of good B. It works with goods that are equally satisfying.

    The MRS decreases along the indifference curve if it is convex-shaped (law of diminishing marginal rates of substitution), if the MRS is constant the curve will be a straight line, if the MRS increases the curve will be concave-shaped.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “The marginal rate of substitution a. varies along an indifference curve if the curve is bowed inward. b. is constant along an indifference ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers