Suppose we measure the quantity of good X on the horizontal axis and the quantity of good Y on the vertical axis. If indifference curves are bowed inward, as we move from having an abundance of good X to having an abundance of good Y, the marginal rate of substitution of good Y for good X (the slope of the indifference curve)
A) rises.
B) stays the same.
C) could rise or fall depending on the relative prices of the two goods.
D) falls.

Question

Quizplus · Accepted Answer

As we move from an abundance of good X to an abundance of good Y, the marginal rate of substitution rises because the consumer is willing to give up more of good Y to obtain an additional unit of good X, reflecting the diminishing marginal rate of substitution.

Suppose We Measure the Quantity of Good X on the Horizontal