Figure 21-12
-Refer to Figure 21-12. The marginal rate of substitution between bundles V and Z is
A)greater than the marginal rate of substitution between bundles Z and T.
B)less than the marginal rate of substitution between bundles Z and T.
C)equal to the marginal rate of substitution between bundles Z and T.
D)We are unable to compare the marginal rates of substitution.

Question

Figure 21-12 
-Refer to Figure 21-12. The marginal rate of substitution between bundles V and Z is
A)greater than the marginal rate of substitution between bundles Z and T. 
B)less than the marginal rate of substitution between bundles Z and T. 
C)equal to the marginal rate of substitution between bundles Z and T. 
D)We are unable to compare the marginal rates of substitution.

Quizplus · Accepted Answer

The marginal rate of substitution between bundles V and Z is the slope of the indifference curve between bundles V and Z. The marginal rate of substitution between bundles Z and T is the slope of the indifference curve between bundles Z and T. In Figure 21-12, the indifference curve between bundles V and Z is steeper than the indifference curve between bundles Z and T. This means that the marginal rate of substitution between bundles V and Z is greater than the marginal rate of substitution between bundles Z and T.

Figure 21-12 -Refer to Figure 21-12. the Marginal Rate of Substitution Between