To derive the demand curve of a product in indifference curve analysis, the
A)budget line is assumed to stay in a fixed position.
B)money income of the consumer is assumed to be variable.
C)prices of both products are assumed to be variable.
D)tastes and preferences of the consumer are assumed to be fixed.

Question

Quizplus · Accepted Answer

In indifference curve analysis, to derive the demand curve of a product, the tastes and preferences of the consumer are assumed to be fixed. This assumption allows the analysis to focus on the effects of changes in prices and income on the quantity demanded, without the complicating factor of changing tastes or preferences.

To Derive the Demand Curve of a Product in Indifference