Imagine an indifference curve graph with units of clothing on the y-axis and visits to the neighborhood pizza joint for dinner on the x-axis. If the indifference curves for this individual are negatively sloped but close to horizontal, it means:
A)the marginal utility from another pizza dinner is high relative to the marginal utility of clothing.
B)the marginal utility from another pizza dinner is low relative to the marginal utility of clothing
C)this person doesn't like pizza at all.
D)this person can spend a lot of money on clothes at times.

Question

Quizplus · Accepted Answer

A negatively sloped indifference curve indicates that as the individual consumes more of one good (in this case, pizza visits), they are willing to give up less of the other good (in this case, clothing). However, if the curve is close to horizontal, it means that the individual is not willing to give up much clothing for more pizza visits, indicating that the marginal utility from another pizza dinner is low relative to the marginal utility of clothing. Therefore, the best answer is B. When indifference curves are negatively sloped but close to horizontal, it indicates that the marginal utility from another pizza dinner is low relative to the marginal utility of clothing. In other words, the individual values clothing more than visits to the neighborhood pizza joint for dinner, and thus would require a significant increase in pizza visits to compensate for a reduction in clothing units.

Imagine an Indifference Curve Graph with Units of Clothing on the Y-Axis