Why do indifference curves have a negative slope?
A)because consumers take market prices as given
B)because consumers face a budget constraint
C)because to keep utility constant, a consumer must get more of one good if she is to give up some of the other
D)because scarcity implies that it is not possible to consume more of one good without giving up some of the other

Question

Quizplus · Accepted Answer

Indifference curves have a negative slope because to keep utility constant, a consumer must get more of one good if she is to give up some of the other. This is known as the law of diminishing marginal rate of substitution. As the consumer consumes more of one good and less of the other, the marginal utility of the good being consumed more decreases while the marginal utility of the good being consumed less increases. This causes the consumer to be willing to give up less of the good being consumed less in exchange for more of the good being consumed more, resulting in a negative slope of the indifference curve.

Why Do Indifference Curves Have a Negative Slope