Convexity of indifference curves implies that _____.
A)the marginal utility of a good decreases as the consumer moves along the indifference curve
B)the total utility decreases as the consumer moves downward along the indifference curve
C)the marginal utility along the indifference curve remains constant
D)the total utility increases as the consumer moves downward along the indifference curve

Question

Quizplus · Accepted Answer

The convexity of indifference curves implies that the slope of the indifference curve decreases as the consumer moves downward along the curve. This means that the marginal rate of substitution (MRS) decreases as the consumer moves along the curve. Since the MRS represents the amount of one good that a consumer is willing to give up to obtain an additional unit of another good while remaining indifferent, a decreasing MRS implies that the marginal utility of the good being given up is decreasing as the consumer obtains more of it. Therefore, choice A is correct. Choices B and D are incorrect because they suggest that the total utility decreases or increases as the consumer moves downward along the indifference curve, which is not necessarily true. Choice C is also incorrect because the marginal utility along the indifference curve may not necessarily remain constant.

Convexity of Indifference Curves Implies That _____