In the (consumption,leisure)space,indifference curves as we have assumed them are
A) downward sloping and bowed out of the origin.
B) downward sloping and bowed towards the origin.
C) upward sloping and bowed out of the origin.
D) upward sloping and bowed towards the origin.

Question

Quizplus · Accepted Answer

Indifference curves are downward sloping because as the quantity of one good (let's say consumption) increases, the individual is willing to give up some of that good to obtain more of the other good (leisure). Additionally, they are bowed towards the origin due to the concept of diminishing marginal substitution. As the individual trades off more and more of one good for the other, the marginal rate of substitution (MRS) decreases, meaning they are less willing to make the trade. This leads to the bowed shape of the indifference curves.

In the (Consumption,leisure)space,indifference Curves as We Have Assumed Them Are