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Moving from combination B (2 food, 6 clothing) to combination C (3 food, 4 clothing) along an indifference curve, the marginal rate of substitution of food for clothing is:
A2
B1
C4
D6
Answer & Solution
Correct answer: A. 2
1. MRS is the units of clothing given up for one extra unit of food.
2. Clothing falls from 6 to 4, a sacrifice of 2 units, for 1 extra unit of food, so MRS = 2.
3. 6 is the MRS for the A-to-B move, 1 is the C-to-D move, and 4 is the clothing left, so those options are wrong.
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 2 Unit II "Theory of Consumer Behaviour", p.13_
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