<p>The MRT need not be the slope of some budget line, it is more generally the slope of the feasible frontier. The MRT appears on the production side, while the MRS appears on the demand side. Apart from the different semantics of &quot;substitution&quot; and &quot;transformation&quot;, using the same name for both would just lead to endless confusion, e.g. <a href="https://www.core-econ.org/the-economy/v1/book/text/leibniz-03-05-01.html" rel="nofollow noreferrer">this chapter</a> of a well known econ textbook would have to be renamed.</p>

CC BY-SA 4.0
2024-12-20T04:37:51.103Z
thanks for the response, that clears it up. my university uses that very same textbook haha
BeginnerCode776
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2024-12-19T14:57:24.720Z
2024-12-19T14:57:24.720Z
VARulle
<p>Why is it marginal rate of TRANSFORMATION for budget lines, but marginal rate of SUBSTITUTION for indifference curves?</p>
<p>In both cases it is measuring the gradient, or in other words, the marginal rate of change for the curve. Hence, why do we say transformation for budget lines, but substitutition for indifference curves?</p>
<p>Why is it not just either MRS or MRT for both cases?</p>
<p>Thanks in advance. I never really understood this, maybe it's just one of those useless distinctions, so I thought I would ask this question.</p>

CC BY-SA 4.0
2024-12-19T16:11:29.080Z
MR-Transformation because it refers to the rate at which one good is *transformed* into another via some production process; while MR-Substitution because it measures the rate at which a good can be *substituted* by another in consumption without changing the level of utility.
Herr K.
<microeconomics>
Why is it MRT for budget lines and MRS for indifference curves when both are essentially the same thing?
BeginnerCode776
# Why is it MRT for budget lines and MRS for indifference curves when both are essentially the same thing?

(Asked by: username_0 on 2024-12-19)

Why is it marginal rate of TRANSFORMATION for budget lines, but marginal rate of SUBSTITUTION for indifference curves?

In both cases it is measuring the gradient, or in other words, the marginal rate of change for the curve. Hence, why do we say transformation for budget lines, but substitutition for indifference curves?

Why is it not just either MRS or MRT for both cases?

Thanks in advance. I never really understood this, maybe it's just one of those useless distinctions, so I thought I would ask this question.

**Tags:** microeconomics

> **Comments:**
> **username_1**: MR-Transformation because it refers to the rate at which one good is *transformed* into another via some production process; while MR-Substitution because it measures the rate at which a good can be *substituted* by another in consumption without changing the level of utility.  

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## 1 answers

### Answer by username_2 on 2024-12-19. Score: 2

The MRT need not be the slope of some budget line, it is more generally the slope of the feasible frontier. The MRT appears on the production side, while the MRS appears on the demand side. Apart from the different semantics of "substitution" and "transformation", using the same name for both would just lead to endless confusion, e.g. [this chapter](https://www.core-econ.org/the-economy/v1/book/text/leibniz-03-05-01.html) of a well known econ textbook would have to be renamed.

> **Comments:**
> **username_0**: thanks for the response, that clears it up. my university uses that very same textbook haha  

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