Question

MRS tends to diminish because of the law of diminishing marginal utility. Comment.

Answer 1

True.

Diminishing MRS suggests that the consumer sacrifices less and less quantity of Good-Y for every additional unit of Good-X. Why does he do it? It is because the rising consumption of Good-X leads to a fall in its MU, while the falling consumption of Good-Y leads to a rise in its MU. This is in accordance with the law of diminishing marginal utility.