Final answer:
The true statement about the Marginal Rate of Substitution (MRS) is that it represents a tradeoff and is therefore always a negative value. The MRS is distinct from the slope of the budget constraint, which indicates opportunity cost. For instance, a slope of -0.25 in a budget constraint means giving up 1/4 of a burger for each additional bus ticket purchased.
Step-by-step explanation:
The statement that accurately describes the Marginal Rate of Substitution (MRS) is: The MRSxy represents a tradeoff and is therefore always a negative value. This is because the MRS reflects the rate at which a consumer is willing to give up some amount of one good in exchange for another good, maintaining the same level of utility.
The MRS is usually derived from the indifference curve, which represents combinations of different goods that provide the same utility to the consumer. As we move along an indifference curve, to gain more of one good, a consumer has to give up some of the other good. Because the consumer is trading off one good for another, the MRS is negative, illustrating that as the quantity consumed of one good increases, the quantity consumed of the other good decreases.
The slope of the budget constraint, however, is related to the opportunity cost, rather than the MRS directly. The opportunity cost illustrates how much of one good must be given up to gain an additional unit of the other good. For example, if the slope of a budget constraint is -0.25, this indicates that the opportunity cost of one bus ticket is 1/4 of a burger, meaning that for every four tickets bought, one burger must be foregone.