When two goods are perfect substitutes, the marginal rate of substitution
A)is constant along the indifference curve.
B)decreases as the scarcity of one good increases.
C)increases as the scarcity of one good increases.
D)changes to reflect the consumer's changing preferences for the goods.

Question

Quizplus · Accepted Answer

When two goods are perfect substitutes, the consumer is willing to substitute one good for another at a constant rate. This means that the marginal rate of substitution is constant along the indifference curve.

When Two Goods Are Perfect Substitutes, the Marginal Rate of Substitution