At any point on an indifference curve, the slope indicates:
A) the market rate of substitution between the two goods.
B) the way the consumer's budget is allocated between the two goods.
C) how the total satisfaction of the consumer changes with different market baskets.
D) None of the statements is correct.

Question

Quizplus · Accepted Answer

The slope of an indifference curve represents the marginal rate of substitution (MRS) between two goods, not the market rate or budget allocation.

At Any Point on an Indifference Curve, the Slope Indicates