Drag the consumer along the budget line to explore why MRS = Price Ratio at the optimum
Market Parameters
Price of X (Px)2.00
Price of Y (Py)3.00
Income (M)120
Preference weight (α)0.50
Current Point Analysis
Good X—
Good Y—
MRS (slope of IC)—
Px/Py (slope of BL)—
Utility (current)—
Utility (optimal)—
Legend
Budget Line
Indifference Curves
Optimal Bundle
Your Bundle
What's happening?
Indifference curves connect all bundles of X and Y that give the same utility. Curves further from the origin = higher utility.
The MRS (Marginal Rate of Substitution) is the slope of an indifference curve — how much Y you'd give up for one more X while staying equally happy.
The budget line shows all bundles you can afford. Its slope is −Px/Py.
Optimization: The best affordable bundle is where the IC is tangent to the budget line — meaning MRS = Px/Py. At any other point, you can do better by trading along the budget line.
Click & drag the orange dot along the budget line · Adjust sliders to change market conditions