Marginal rate of substitution of necklaces for earrings

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Reference no: EM131448631

Cher's marginal rate of substitution of necklaces (N) for earrings (E) is 5 (MRSEN = 5).

This information implies that:

A. Cher should own 5 times as many necklaces as pairs of earrings.

B. Cher will move to a higher indifference curve if she trades away 5 necklaces for one more pair of earrings.

C. the slope of the indifference curve is 5 and thus upward sloping.

D. Cher is willing to trade away 5 necklaces for one more pair of earrings, holding her utility constant.

Reference no: EM131448631

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