Chers marginal rate of substitution of earrings e for, Ask an Expert

Economics

Cher's marginal rate of substitution of earrings (E) for necklaces (N) is 5 (MRS_EN = 5). This information implies that:

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

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

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

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

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Business Economics, Economics

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