Assume that a consumer's indifference curve is a downward-sloping straight line. As the consumer moves from left to right along the horizontal axis, the consumer's marginal rate of substitution
A)increases.
B)decreases.
C)remains constant.
D)increases, then decreases.

Question

Quizplus · Accepted Answer

When the indifference curve is a straight line, it implies that the consumer's willingness to trade one good for another remains constant along the entire curve. This means that the marginal rate of substitution (MRS), which measures the rate at which a consumer is willing to exchange one good for another, will also remain constant. Therefore, the correct answer is C, which states that the MRS remains constant as the consumer moves along the horizontal axis.

Assume That a Consumer's Indifference Curve Is a Downward-Sloping Straight