When the indifference curve is steep,the consumer has a
A) high marginal rate of substitution for the good on the horizontal axis.
B) low marginal rate of substitution for the good on the horizontal axis.
C) large budget.
D) small budget.
E) steep budget line.

Question

Quizplus · Accepted Answer

When the indifference curve is steep, it means that the consumer is willing to give up a significant amount of the good on the horizontal axis for a small increase in the good on the vertical axis. This implies a high marginal rate of substitution for the good on the horizontal axis since the consumer values it highly and is willing to trade away more of it for the other good.

When the Indifference Curve Is Steep,the Consumer Has a