Use the figure below to answer the following questions.

Figure 9.2.3
-Refer to Figure 9.2.3. Rashid buys only books and albums. The figure shows his preferences. When Rashid chooses the consumption point of 3 books and 2 albums, his marginal rate of substitution is
A)1 book per album.
B)zero.
C)3/2 books per album.
D)2/3 books per album.
E)0.5 books per album.

Question

Use the figure below to answer the following questions.
  
Figure 9.2.3
-Refer to Figure 9.2.3. Rashid buys only books and albums. The figure shows his preferences. When Rashid chooses the consumption point of 3 books and 2 albums, his marginal rate of substitution is
A)1 book per album. 
B)zero. 
C)3/2 books per album. 
D)2/3 books per album. 
E)0.5 books per album.

Quizplus · Accepted Answer

The marginal rate of substitution (MRS) is the rate at which a consumer is willing to trade one good for another while keeping their level of satisfaction constant. In this case, Rashid is willing to give up 1 book for 2 albums, so the MRS is 1 book per album.

Use the Figure Below to Answer the Following Questions