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Q: The slope of an indifference curve is measured by:
  • A. marginal rate of transformation
  • B. marginal rate of technical substitution
  • C. marginal rate of effective exchange
  • D. marginal rate of substitution
Correct Answer: Option D - The slope of the indifference curve is known as the marginal rate of substitution (MRS). The MRS is the rate at which the consumer is willing to give up one good for another. For example, a consumer who values apples will be reluctant to give them up for oranges and the slope will reflect this rate of substitution.
D. The slope of the indifference curve is known as the marginal rate of substitution (MRS). The MRS is the rate at which the consumer is willing to give up one good for another. For example, a consumer who values apples will be reluctant to give them up for oranges and the slope will reflect this rate of substitution.

Explanations:

The slope of the indifference curve is known as the marginal rate of substitution (MRS). The MRS is the rate at which the consumer is willing to give up one good for another. For example, a consumer who values apples will be reluctant to give them up for oranges and the slope will reflect this rate of substitution.