Question 37
MediumOriginal questionAn indifference curve is convex to the origin because
Show the answer and explanation
CorrectNot quiteAnswer B
Correct answer: B
Explanation
As the consumer has more of good 1 and less of good 2, he gives up fewer units of good 2 for each extra unit of good 1.
A falling MRS makes the curve flatter as it moves right: convex to the origin.
Worth noting
A rising rate gives a concave shape, as with the PPC's MRT.
- Concept
- Convexity and diminishing MRS
- Typical timeTypical
- 70 s
- Your timeYours
- —
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