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Suppose a consumer moves up and to the left along an indifference curve from point A to point B. If the consumer gives up one unit of X (on the horizontal axis), but only requires a small amount of good Y (on the vertical axis) to compensate, then what can we say about the marginal rate of substitution and the slope of the indifference curve between points A and B

Sagot :

batolisis

Answer: hello options to your question is missing attached below is the complete question

answer : The marginal rate of substitution is low and the indifference curve is relatively  flat

Explanation:

What we can say about the marginal rate of substitution and the slope of the indifference curve between points A and B is that the marginal rate of substitution is low and the indifference curve is relatively flat

Along an indifference curve the Total utility will remain unchanged along the curve hence the movement from point A to point B does not change the value of  total utility but if the consumer gives up one unit of X and requires a small amount of good Y then we can say the MRS is low  

marginal rate of substitution is calculated as ; Δy / Δx

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