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Question : Marginal rate of exchange also denotes:

Option 1: Slope of Demand Curve

Option 2: Slope of budget line 

Option 3: Slope of IC Curve

Option 4: None of the above


Team Careers360 21st Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: Slope of budget line 


Solution : The slope of the budget line, which is the ratio of the price of good X to the price of good Y, is the marginal rate of exchange. The marginal rate of substitution, on the other hand, is the slope of the indifference curve that measures the units of good y sacrificed to gain one additional unit of good x.
Hence correct will be option B.

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