According an indifference curve, going from point B to C, what is the position of MRS ?

3 : 1

The correct answer is option (2) : 3 : 1

The amount of apples that the consumer has to forego, in order to get an additional orange, her total utility level being the same, is called marginal rate of substitution (MRS). In other words, MRS is simply the rate at which the consumer will substitute bananas for mangoes, so that her total utility remains constant. 

It can be noticed that when we increase the quantity of oranges, the quantity of apples sacrificed for each additional orange declines. In other words, MRS diminishes with increase in the number of oranges. As the number of oranges with the consumer increases, the MU derived from each additional orange falls. Similarly, with the fall in quantity of apples, the marginal utility derived from apples increases. So, with increase in the number of oranges, the consumer will feel the inclination to sacrifice small and smaller amounts of apples. This tendency for the MRS to fall with increase in quantity of oranges is known as Law of Diminishing Marginal Rate of Substitution. Going from point A to point B, the consumer sacrifices 4 apples for 1 orange, going from point B to point C, the consumer sacrifices 3 apples for 1 orange, and going from point C to point D, the consumer sacrifices just 1 apple for 1 orange. Thus, it is clear that the consumer sacrifices smaller and smaller quantities of apple for each additional orange.