The correct answer is: B. Marginal rate of substitution.
The marginal rate of substitution (MRS) is the rate at which a consumer is willing to give up one good in exchange for another. It is measured as the ratio of the marginal utility of the two goods.
The slope of an indifference curve is equal to the marginal rate of substitution. This is because the indifference curve shows all the combinations of goods that give the consumer the same level of satisfaction. If the consumer is willing to give up more of one good in exchange for another, then the marginal rate of substitution is high and the indifference curve is steep. If the consumer is not willing to give up much of one good in exchange for another, then the marginal rate of substitution is low and the indifference curve is shallow.
The other options are incorrect because:
- Option A is the price ratio between two commodities. This is not the same as the marginal rate of substitution.
- Option C is factor substitution. This is the process of using different factors of production to produce a good. This is not the same as the marginal rate of substitution.
- Option D is level of indifference. This is the level of satisfaction that a consumer gets from consuming a combination of goods. This is not the same as the marginal rate of substitution.