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Economics Mcqs
Q
Suppose we measure the quantity of good X on the horizontal axis and the quantity of good Y on the vertical axis If indifference curves are bowed inward, as we move from having an abundance of good X to having an abundance of good Y, the marginal rate of substitution of good Y for good X (the slope of the indifference curve) ?
AA. Rises
BB. Stays the same
CC. Could rise or fall depending on the relative prices of the two goods.