The marginal rate of substitution increases as the consumer moves from left to right along a given indifference curve.

Question

Quizplus · Accepted Answer

The marginal rate of substitution (MRS) decreases as the consumer moves from left to right along a given indifference curve. This is because as the consumer consumes more of one good, the marginal utility derived from that good decreases, making the consumer willing to give up less of it for an additional unit of the other good. Therefore, the MRS decreases, indicating a diminishing marginal rate of substitution.

The Marginal Rate of Substitution Increases as the Consumer Moves