Increasing consumption of one good means consumption of the other good must decrease in order to maintain constant utility. Additionally, individuals experience less marginal utility for each additional unit consumed. These statements explain why indifference curves must be:

a. downward-sloping and concave.

b. downward-sloping and convex.

c. upward-sloping and concave.

d. upward-sloping and convex.

Question

Abram Knapp

Business

28 September, 21:22

Increasing consumption of one good means consumption of the other good must decrease in order to maintain constant utility. Additionally, individuals experience less marginal utility for each additional unit consumed. These statements explain why indifference curves must be:

a. downward-sloping and concave.

b. downward-sloping and convex.

c. upward-sloping and concave.

d. upward-sloping and convex.

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Answers (1)

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Hanna · Answer 1

downward-sloping and concave

Explanation:

The indifference curves must be downward-sloping and concave because the consumption of one product decreases with the rise in the consumption of other product. Marginal utility also adds up to the concave shape of this curve because the goods' consumption is plotted against both axes. Hence, the downward trend represents the inverse proportionality between compared products.