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Question
As one moves upward towards left along an Indifference curve the MRS of commodity 'X' for commodity 'Y' ___________.
As one moves upward towards left along an Indifference curve the MRS of commodity 'X' for commodity 'Y' ___________.
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Solution
The correct option is D increases
Assuming quantity of good Y is on the Y axis and the quantity of good X is on the X axis, the consumer would have to give up more of good X for one more unit of good Y as the indifference is sloping downwards. Hence, a higher MRS for commodity X for commodity Y.
Assuming quantity of good Y is on the Y axis and the quantity of good X is on the X axis, the consumer would have to give up more of good X for one more unit of good Y as the indifference is sloping downwards. Hence, a higher MRS for commodity X for commodity Y.
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