Bobby moves along an indifference curve for shirts and pants by increasing consumption of shirts and decreasing consumption of pants. As Bobby has more and more pants, the number of shirts he is willing to trade for yet another pair of pants
A) decreases.
B) does not change.
C) increases.
D) initially decreases and then increases.

Question

Quizplus · Accepted Answer

Moving along an indifference curve, if Bobby increases consumption of shirts and decreases consumption of pants, it means the marginal rate of substitution (MRS) of pants for shirts decreases. This implies he values additional pants less as he has more of them, so he is willing to trade fewer shirts for another pair of pants.

Bobby Moves Along an Indifference Curve for Shirts and Pants