Asked by Kenny Wayne on Jun 18, 2024
Verified
An indifference curve:
A) may be either upsloping or downsloping,depending on whether the two products are complements or substitutes.
B) is downsloping and convex to the origin.
C) is upsloping and has a constant slope.
D) is downsloping and concave to the origin.
Indifference Curve
A graph showing different combinations of two goods that provide equal satisfaction and utility to a consumer.
Convex
In geometry and economics, convex refers to a shape or function that curves outward or has a bulging shape, often indicating a relationship where marginal effects increase over a range.
Concave
Describes a curve or surface that is curved inward, resembling the interior of a circle or sphere.
- Comprehend the concept and characteristics of indifference curves.
Verified Answer
VN
Vinny NicastroJun 19, 2024
Final Answer :
B
Explanation :
Indifference curves are downsloping and convex to the origin because they represent combinations of goods between which a consumer is indifferent, showing that as the quantity of one good increases, the quantity of the other must decrease to maintain the same level of utility, and the marginal rate of substitution decreases as one moves down along the curve.
Learning Objectives
- Comprehend the concept and characteristics of indifference curves.