Discussion Forum : Consumer Theory Vs Real Consumers
Question - Suppose we measure the quantity of good X on the horizontal axis and the quantity of good Y on the vertical axis If indifference curves are bowed inward, as we move from having an abundance of good X to having an abundance of good Y, the marginal rate of substitution of good Y for good X (the slope of the indifference curve) ?
Options:
A .  rises
B .  stays the same
C .  could rise or fall depending on the relative prices of the two goods.
D .  falls
Answer: Option A
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!

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