Table of contents

0. Basic Principles of Economics1h 5m
1. Reading and Understanding Graphs59m
2. Introductory Economic Models1h 10m
3. The Market Forces of Supply and Demand2h 26m
4. Elasticity2h 26m
5. Consumer and Producer Surplus; Price Ceilings and Floors3h 45m
6. Introduction to Taxes and Subsidies1h 46m
7. Externalities1h 12m
8. The Types of Goods1h 13m
9. International Trade1h 16m
10. The Costs of Production2h 35m
11. Perfect Competition2h 23m
12. Monopoly2h 13m
13. Monopolistic Competition1h 9m
14. Oligopoly1h 26m
15. Markets for the Factors of Production1h 26m
16. Income Inequality and Poverty35m
17. Asymmetric Information, Voting, and Public Choice39m
18. Consumer Choice and Behavioral Economics1h 16m

18. Consumer Choice and Behavioral Economics

Indifference Curves

Microeconomics

18. Consumer Choice and Behavioral Economics

Indifference Curves

Previous problem

Struggling with Microeconomics?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

If the marginal rate of substitution is equal to 2 at a point on an indifference curve, then the consumer would:

Give up 1 units of the 'y-axis' good for 2 units of the 'x-axis' good

Give up 2 units of the 'y-axis' good for 1 unit of the 'x-axis' good

Pay an additional $2 for one unit of the 'y-axis' good

Pay an additional $2 for one unit of the 'x-axis' good

Previous problem

Verified step by step guidance

Understand the concept of the Marginal Rate of Substitution (MRS): The MRS is the rate at which a consumer is willing to give up one good in exchange for another while maintaining the same level of utility. It is the slope of the indifference curve at any given point.

Identify the given MRS: In this problem, the MRS is given as 2. This means the consumer is willing to give up 2 units of the 'y-axis' good for 1 additional unit of the 'x-axis' good to stay on the same indifference curve.

Interpret the MRS value: A MRS of 2 implies that the consumer values 1 unit of the 'x-axis' good as equivalent to 2 units of the 'y-axis' good. Therefore, the consumer would give up 2 units of the 'y-axis' good to gain 1 unit of the 'x-axis' good.

Evaluate the options: Compare the interpretation of the MRS with the given options. The correct interpretation aligns with the option that states the consumer would give up 2 units of the 'y-axis' good for 1 unit of the 'x-axis' good.

Conclude the analysis: Based on the understanding of MRS and the options provided, the correct choice is the one that reflects the consumer's willingness to trade 2 units of the 'y-axis' good for 1 unit of the 'x-axis' good, which matches the MRS of 2.