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Agriculture Economics QUESTION #11886
Question 1
The Marginal Rate of Substitution ($MRS$) is defined as:
  • The slope of the budget constraint
  • The slope of the indifference curve, showing the rate of trade-off between two goods that keeps utility constant✔️
  • The ratio of the two goods' market prices
  • The change in income divided by the change in price
Correct Answer Explanation
$MRS$ is the slope of the indifference curve, representing how much of one good a consumer will give up for another while remaining equally satisfied.