Marginal rate of substitution indicates:
(a) slope of production possibility curve (b) slope of indifference cur
(c) slope of budget line
(d) slope of income line
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Answer:
B
Explanation:
indifference curve is convex to the origin because of diminishing marginal rate of substitution,based upon the law of diminishing marginal utility, which means that as the consumer consumes more and more units of good x, he would be willing to sacrifice lesser and lesser units of good y.
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