Consider a graph with Yvonne's income on the Y-axis and Xavier's income on the X-axis.Yvonne has twice as much income as Xavier.If Yvonne cares about the material well-being of Oscar,and considers the latter's income as an economic good,the slope of the indifference curves representing Yvonne's preferences:
A)will be steeper,the more willing she is to transfer some of her income to Xavier.
B)will be flatter,the more willing she is to transfer some of her income to Xavier.
C)cannot be determined from the information given.
D)will not change as Yvonne's willingness to donate to Xavier changes.

Question

Quizplus · Accepted Answer

Yvonne cares about Oscar's income, so she will be willing to transfer some of her income to Xavier if it means that Oscar will have more income. The more willing she is to transfer income, the steeper the slope of her indifference curves will be.

Consider a Graph with Yvonne's Income on the Y-Axis and Xavier's