In econ module, reading 14, question 4 "4. If a consumer’s marginal rate of substitution of good X for good Y (MRSXY) is equal to 2, then the: A. consumer is willing to give up 2 units of X for 1 unit of Y. B. slope of a line tangent to the indifference curve at that point is 2. C. slope of a line tangent to the indifference curve at that point is –2." Why is A not the correct answer?

Its yet another example of economists being backwards. MRS(XY) = Delta(Y)/Delta(X) so is the number of units of good Y that they will give up for an additional unit of good X.

A CFA Level 1 Discussion About Query On A Question In Module

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- aanchalb
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  22 Apr 2017 at 6:52 am
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  In econ module, reading 14, question 4
  “4. If a consumer’s marginal rate of substitution of good X for good Y (MRSXY) is equal to 2, then the:
  A. consumer is willing to give up 2 units of X for 1 unit of Y. B. slope of a line tangent to the indifference curve at that point is 2. C. slope of a line tangent to the indifference curve at that point is –2.”
  Why is A not the correct answer?
- Swift
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  22 Apr 2017 at 7:14 am
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  Its yet another example of economists being backwards. MRS(XY) = Delta(Y)/Delta(X) so is the number of units of good Y that they will give up for an additional unit of good X.
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