Jodie has indifference curves for CDs and colas, with CDs on the vertical axis. The flatter her indifference curves are, the
A) smaller her marginal rate of substitution.
B) larger her average rate of substitution.
C) smaller her average rate of substitution.
D) larger her marginal rate of substitution.

Question

Quizplus · Accepted Answer

The marginal rate of substitution (MRS) represents the rate at which a consumer is willing to substitute one good for another while maintaining the same level of utility. A flatter indifference curve indicates that the consumer is willing to give up a relatively small amount of the good on the vertical axis (CDs) for additional units of the good on the horizontal axis (colas), implying a smaller MRS.

Jodie Has Indifference Curves for CDs and Colas, with CDs