Why is indifference curve convex to the origin Mcq?
(b) An indifference curve is convex to the origin because of diminishing marginal rate of substitution.
How does the indifference curve to the origin?
Description: Graphically, the indifference curve is drawn as a downward sloping convex to the origin. The graph shows a combination of two goods that the consumer consumes. The consumer will be satisfied at any point along the curve assuming that other things are constant.
Is indifference curve concave to the origin?
Most indifference curves are usually convex because, as you consume more of one good, you will consume less of the other. If the marginal rate of substitution is increasing, the indifference curve will be concave to the origin.
How do you know if an indifference curve is convex?
Convexity of indifference curves implies that the marginal rate of substitution of X for Y falls as more of X is substituted for Y. Thus, indifference curves are convex to the origin when principle of diminishing marginal rate of substitution holds good and which is generally the case.
Why is an indifference curve negatively sloped explain?
The indifference curves must slope down from left to right. This means that an indifference curve is negatively sloped. It slopes downward because as the consumer increases the consumption of X commodity, he has to give up certain units of Y commodity in order to maintain the same level of satisfaction.
What is a convex indifference curve?
Why indifference curve is concave to the origin?
If the marginal rate of substitution is increasing, the indifference curve will be concave to the origin. This is typically not common since it means a consumer would consume more of X for the increased consumption of Y (and vice versa).
What does a convex indifference curve mean?
Why do indifference curves have a negative slope quizlet?
Why does the an indifference curve have a negative slope? marginal rate of substitution- the rate at which you are willing to reduce the consumption of one good to get one more unit of another good and still remain indifferent. can an indifference curve intersect another indifference curve?
What does an indifference curve represent?
An indifference curve shows a combination of two goods that give a consumer equal satisfaction and utility thereby making the consumer indifferent.
Why is indifference curves negatively sloped?
Answer : An indifference curve always slopes downward from left to right, i.e. it has a negative slope. This is so because if a consumer wants to have more units of one commodity; he will have to reduce the number of units of the other commodity, due to his limited income.
Can an indifference curve be concave?
However, when the indifference curves are concave consumer’s equilibrium will inevitably be a corner solution. This implies that more of commodity X a consumer has the more useful or significant in terms of satisfaction an extra unit of it becomes.
What is the slope of an indifference curve?
The slope of the indifference curve is known as the MRS, or the marginal rate of substitution. Stated simply, the MRS is the rate at which the consumer is willing to give up one good for another.
What is indifference curve theory?
Indifference curve. In microeconomic theory, an indifference curve is a graph showing different bundles of goods between which a consumer is indifferent. That is, at each point on the curve, the consumer has no preference for one bundle over another.
What is a linear indifference curve?
Answer : Linear indifference curves are indifference curves that have the same slope every- where — i.e. indifference curves with constant rather than diminishing MRS . Thus, the MRS cannot depend on x 1 or x 2 for the indifference curve to be linear — which is the case only for u B ( x 1 , x 2 ).