Goods X and Y

For the following questions, assume that good X is on the horizontal axis and good Y is on the vertical axis in the consumer-choice diagram. PX denotes the price of good X, PY is the price of good Y, and I is the consumer's income. Unless otherwise stated, the consumer's preferences are assumed to satisfy the standard assumptions.

-Refer to Goods X and Y.If the indifference curves are downward sloping straight lines (rather than convex curves),then we can conclude that
A) X does not affect the individual's utility.
B) Y does not affect the individual's utility.
C) both X and Y affect the individual's utility.
D) neither good affects the individual's utility.

Question

Goods X and Y

For the following questions, assume that good X is on the horizontal axis and good Y is on the vertical axis in the consumer-choice diagram. PX denotes the price of good X, PY is the price of good Y, and I is the consumer's income. Unless otherwise stated, the consumer's preferences are assumed to satisfy the standard assumptions.

-Refer to Goods X and Y.If the indifference curves are downward sloping straight lines (rather than convex curves),then we can conclude that
A) X does not affect the individual's utility.
B) Y does not affect the individual's utility.
C) both X and Y affect the individual's utility.
D) neither good affects the individual's utility.

Quizplus · Accepted Answer

If the indifference curves are downward sloping straight lines, it means that the individual's marginal rate of substitution between X and Y is constant, which implies that both goods affect the individual's utility.