Liana consumes only beer and chips. Her indifference curves are all bowed inward. Consider the bundles (2,6), (4,4), and (6,2). If Liana is indifferent between (2,6) and (6,2), then Liana must

Question

Quizplus · Accepted Answer

Given that Liana's indifference curves are bowed inward and she is indifferent between (2,6) and (6,2), the principle of diminishing marginal rate of substitution implies that a balanced bundle like (4,4) will be preferred because it provides a more optimal combination of beer and chips, maximizing her utility.

Liana Consumes Only Beer and Chips