The nonsatiation assumption implies that:
A)indifference curves do not cross.
B)indifference curves have a negative slope.
C)indifference curves have a positive slope.
D)indifference curves are continuous.

Question

Quizplus · Accepted Answer

The nonsatiation assumption implies that individuals always prefer more of a good to less. This means that indifference curves cannot have a positive slope (as this would imply that more of both goods is less preferred than less of both goods) and cannot cross (as this would imply that two different bundles are equally preferred, which contradicts the idea of always preferring more). Thus, indifference curves must have a negative slope. Continuous and smooth indifference curves are also common assumptions, but those are not implied by nonsatiation.

The Nonsatiation Assumption Implies That