Two key properties of indifference curves are that an indifference curve slopes
A)downward and is bowed out from the origin.
B)upward and is bowed out from the origin.
C)downward and is bowed in toward the origin.
D)upward and is bowed in toward the origin.
E)downward and is concave from the origin.

Question

Quizplus · Accepted Answer

Indifference curves slope downward because as you consume more of one good, you need to consume less of another good to maintain the same level of utility. They are bowed in toward the origin (convex) because of the principle of diminishing marginal rate of substitution, which states that as you consume more of one good, the amount of the other good you are willing to give up to get one more unit of the first good decreases.

Two Key Properties of Indifference Curves Are That an Indifference