Question

If the slope of the indifference curve between goods X and Y is steeper than the slope of the budget line, and X is on the horizontal axis:_______.a. MRS = −PX/PY.b. the consumer is willing to give up more of good X to get an additional unit of good Y than is necessary under the current market prices.c. the consumer is willing to give up more of good Y to get an additional unit of good X than is necessary under the current market prices.d. MRS > PX/PY.

Answer 1

c. the consumer is willing to give up more of good Y to get an additional unit of good X than is necessary under the current market prices.

Step-by-step explanation:

The slope of an indifference curve measures the marginal rate of substitution, or basically how much of good Y you are willing to give up in order to consume more of good X. While the slope of the budget line is basically the relationship between the price of good Y over the price of good X.

When the slope of the indifference curve is steeper, you are willing to consume more of good X and less of good Y.