Preferences What the Consumer Wants The consumer's preferences The consumer is indifferent, or equally happy, with the combinations shown at points A, B and c because they are all on the same curve The marginal Rate of Substitution The slope at any point on an indifference curve is the marginal rate of substitution e It is the rate at which a consumer is willing to trade one good for another o It is the amount of one good d tha at a consumer requires as compensation to give up one unit of the other goodPreferences: What the Consumer Wants • The Consumer’s Preferences – The consumer is indifferent, or equally happy, with the combinations shown at points A, B, and C because they are all on the same curve. • The Marginal Rate of Substitution – The slope at any point on an indifference curve is the marginal rate of substitution. •It is the rate at which a consumer is willing to trade one good for another. •It is the amount of one good that a consumer requires as compensation to give up one unit of the other good