Marginal Rate of Substitution (MRS)
The Marginal Rate of Substitution (MRS) quantifies the trade-off an individual is willing to make between two goods while maintaining the same utility level. While the MRS is conceptually linked to the slope of the indifference curve, there is a key mathematical distinction: the slope of a standard indifference curve is negative, reflecting the trade-off, whereas the MRS is always expressed as a positive number. Therefore, the MRS is precisely defined as the absolute value of the indifference curve's slope at any given point.
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