The marginal rate of transformation of y for x represents
A) the slope of the budget constraint.
B) the rate at which the consumer must give up y to get one more x.
C) -Pₓ/Pᵧ.
D) All of the above.

Question

Quizplus · Accepted Answer

The marginal rate of transformation of y for x represents the rate at which the consumer must give up y to get one more x. It is also equal to -Pₓ/Pᵧ, where Pₓ and Pᵧ are the prices of x and y, respectively. The slope of the budget constraint is equal to -Pₓ/Pᵧ, so the marginal rate of transformation of y for x is also equal to the slope of the budget constraint.

The Marginal Rate of Transformation of Y for X Represents