The concept of diminishing marginal rate of substitution indicates that
A) along an indifference curve, a consumer prefers the consumption combinations moving to the northwest along the curve.
B) individuals are willing to give up an increasing amount of good Y in order to obtain one more unit of good X as the consumption of good X increases.
C) individuals are willing to give up a decreasing amount of good Y in order to obtain one more unit of good X as the consumption of good X increases.
D) None of the above answers is correct.

Question

Quizplus · Accepted Answer

The diminishing marginal rate of substitution reflects the principle that as a consumer has more of good X, they are willing to give up less of good Y to get additional units of X, indicating a decreasing willingness to substitute Y for X as X increases.

The Concept of Diminishing Marginal Rate of Substitution Indicates That