Which of the Following Statements About the Marginal Rate of Substitution

question 37

Multiple Choice

Which of the following statements about the marginal rate of substitution is NOT correct?

• A) It measures the number of units of the good on the horizontal axis that a consumer must be compensated with to give up a unit of the good on the vertical axis, while remaining on the same indifference curve.
• B) It is measured by the slope of the indifference curve.
• C) It decreases in value when moving downward along a typical-shaped indifference curve.
• D) It is constant for goods that are perfect substitutes.

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