The table shows an indifference schedule for several combinations of X and Y. How much of X is the consumer willing to give up to obtain the fourth unit of Y?
A) 6
B) 2
C) 2.5
D) 4

Question

The table shows an indifference schedule for several combinations of X and Y.  How much of X is the consumer willing to give up to obtain the fourth unit of Y?
A) 6 
B) 2 
C) 2.5 
D) 4

Quizplus · Accepted Answer

To obtain the fourth unit of Y, the consumer is willing to give up 2 units of X. This can be seen by the marginal rate of substitution (MRS) between the third and fourth units of Y, which is equal to the absolute value of the slope of the indifference curve at that point. The MRS between the third and fourth units of Y is 2, which means the consumer is willing to give up 2 units of X to obtain an additional unit of Y. Therefore, the best choice(s) cannot be determined solely based on the information provided in the question.

The Table Shows an Indifference Schedule for Several Combinations of X