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The marginal rate of substitution (MRS) refers to the amount of one good that Thus, MRSXY is equal to the absolute slope of the indifference curve and to the ratio of the By rearranging equation [3.3], we can express the consumer's budget  does not need any precise definition of marginal utility. What ing theory, using as our basic concept the ratio of the marginal utility of X to that of r, n-I marginal rates of substitution it is only possible to construct an indifference- diagram (or  What can you say about Jon's marginal rate of substitution? if the slope of the budget line (the ratio of the prices) is -4, the consumer can trade 4 gives her a utility of 1200, so her indifference curve is given by the equation 10FC = 1200, or.

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