The correct answer is A. A consumer has only one indifference curve.
An indifference curve is a graph that shows all the combinations of goods that a consumer is indifferent between. In other words, a consumer is equally satisfied with any combination of goods that lies on the same indifference curve.
A consumer can have an infinite number of indifference curves, each representing a different level of satisfaction. The higher the indifference curve, the higher the level of satisfaction.
The marginal rate of substitution (MRS) is the rate at which a consumer is willing to give up one good in exchange for another. The MRS is equal to the slope of the indifference curve at any point.
The diminishing marginal rate of substitution means that a consumer is willing to give up less of one good in exchange for another good as they consume more of the first good. This is because as a consumer consumes more of one good, they become less and less satisfied with additional units of that good.
Here is a diagram that shows an indifference curve and the marginal rate of substitution:
[Diagram of an indifference curve with the marginal rate of substitution labeled]
The indifference curve is the blue line. The marginal rate of substitution is the slope of the indifference curve. The MRS is equal to the amount of good Y that a consumer is willing to give up in exchange for one unit of good X.
As you can see, the MRS decreases as you move down the indifference curve. This is because the consumer is becoming less and less willing to give up good Y in exchange for good X as they consume more of good X.