Suppose that MRS x,y = 10.
A) The consumer is willing to substitute 10 units of for 1 unit of to leave utility unchanged.
B) The consumer is willing to substitute 10 units of for 1 unit of to leave utility unchanged.
C) Regardless of prices, the consumer will consume only .
D) Regardless of prices, the consumer will consume only .

Question

Suppose that MRS x,y = 10.
A) The consumer is willing to substitute 10 units of for 1 unit of to leave utility unchanged. 
B) The consumer is willing to substitute 10 units of for 1 unit of to leave utility unchanged. 
C) Regardless of prices, the consumer will consume only . 
D) Regardless of prices, the consumer will consume only .

Quizplus · Accepted Answer

MRSS1U1B1x,y measures the marginal rate of substitution between goods x and y. It indicates the amount of y that the consumer is willing to give up for one unit of x while maintaining the same level of utility. In this case, the value of MRSS1U1B1x,y is 10, which means that the consumer is willing to give up 10 units of y for one unit of x. Thus, option B is correct as it states that the consumer is willing to substitute 10 units of good 11ea71e2_6308_576d_89cd_45ab51fcab11_TB1644_11 for 1 unit of 11ea71e2_6308_576e_89cd_ebd5ec6bdaf3_TB1644_11 to maintain the same level of utility. Options A, C, and D do not provide any relevant information about the consumer's preferences and therefore are incorrect.

Suppose That MRSx,y = 10

Suppose That MRS_x,y= 10