Indifference curves are convex to the origin if
A)a person's marginal rate of substitution declines as he or she consumes more of a good.
B)a person's marginal rate of substitution increases as he or she consumes more of a good.
C)the law of diminishing marginal utility does not hold.
D)a person's marginal rate of substitution rises as he or she consumes more of a good.

Question

Quizplus · Accepted Answer

Convexity of indifference curves implies diminishing marginal rate of substitution. This means that as a person consumes more of a good, the marginal utility they derive from it decreases, causing them to be willing to give up less of another good to obtain more of it. Therefore, option A is the correct choice.

Indifference Curves Are Convex to the Origin If