Final answer:
The marginal rate of substitution measures the rate at which a consumer is willing to trade off one good for another while maintaining a constant level of utility. It is calculated by taking the ratio of the change in the quantity of one good divided by the change in the quantity of the other good.
Step-by-step explanation:
The marginal rate of substitution (MRS) measures the rate at which a consumer is willing to trade off one good for another while maintaining a constant level of utility. It represents the amount of one good a consumer is willing to give up in order to obtain an additional unit of another good. MRS is calculated by taking the ratio of the change in the quantity of one good divided by the change in the quantity of the other good.
For example, let's consider a consumer who is deciding how many units of pizza and burgers to consume. If the consumer is willing to trade 3 pizzas for 1 burger, the MRS between pizza and burgers is 3:1. This means the consumer is willing to give up 3 pizzas in order to obtain 1 additional burger while still being equally satisfied.
To calculate the MRS between two goods, you need to compare their quantities and determine how much of one good the consumer is willing to give up to obtain an additional unit of the other good.