Assume Victoria's indifference curves are bowed outward but her indifference curves satisfy the other three properties of indifference curves. As Victoria moves from right to left along the horizontal axis, her marginal rate of substitution
A)increases.
B)decreases.
C)remains constant.
D)increases, then decreases.

Question

Quizplus · Accepted Answer

When indifference curves are bowed outward, the marginal rate of substitution decreases as one moves down along an indifference curve. As Victoria moves from right to left along the horizontal axis, she is moving from a higher quantity of one good to a lower quantity of that good, which means she will have to give up more and more of it to receive an additional unit of the other good. Therefore, her marginal rate of substitution decreases.

Assume Victoria's Indifference Curves Are Bowed Outward but Her Indifference