The rate at which the consumer is willing to substitute one good for another without changing the level of satisfaction is known as :
[amp_mcq option1=”Marginal rate of substitution” option2=”Marginal rate of technical substitution” option3=”Diminishing marginal utility” option4=”Equi-marginal utility” correct=”option1″]
This question was previously asked in
UPSC CAPF – 2014
– Marginal Rate of Technical Substitution (MRTS): Rate at which a firm substitutes one input for another to maintain constant output.
– Diminishing Marginal Utility: The concept that the additional utility gained from consuming one more unit of a good decreases as consumption increases.
– Equi-marginal utility: Condition for consumer equilibrium where the ratio of marginal utility to price is equal for all goods.