MRS: a general question!?

Question

Is MRS constant as one moves along the same indifference curve? Explain your response.

Answer 1

No I'm sure it's not...

U leave me clueless...

Answer 2

No, MRS is different at any point (combination of goods) because of diminishing marginal utility concept for most goods, but there could be some exceptions.

Answer 3

It is a myth that MRS is different on different points on the indifference curve. The MRS can be constant, and the only time MRS is constant, is when the goods are perfect substitute. In another words, it is a linear. However, otherwise, most of the time the MRS is different. Depending again, on the nature of the X and Y, there are cases whereby the MRS is experiencing diminishing marginal utility or increasing marginal disutility, Suppose instead of good X and good Y, the individual is faced with bad X and bad Y (Economic bad or economic evil is the opposite of an economic good, where increase in quantity will reduce individual's utility. Examples includes risk, efforts, scoldings etc.), the indifference curve will be convex, rather than concave, implying increasing marginal disutility.

In essence, the MRS is simply the gradient of the indifferent curve, to find it, simply differentiate your utility function. :)

Since you raise this question, it reminds me of an important characteristic of indifference curve: if individual is faced with an indifference curve where good X and Y are perfect substitute, i.e. constant MRS, it will be a cornered solution, depending on the slope of the budget constraint.