Which of the following will change the slopes of your indifference curves between petrol and movie rentals?
A) Only a change in the price of either of the two goods.
B) A change in your preferences for either of the two goods.
C) Only a change in your income.
D) Both a change in the price of either good and a change in income will change the slopes of your indifference curves.

Question

Quizplus · Accepted Answer

A change in preferences for either of the two goods will change the slopes of your indifference curves because it alters the rate at which you are willing to substitute one good for another. Changes in prices or income affect the budget constraint but do not directly change the slope of indifference curves, which reflect preferences.

Which of the Following Will Change the Slopes of Your