The shape of a person's indifference curves between two goods depends on
A)the prices of the two goods.
B)the person's income.
C)the degree of substitutability between the two goods.
D)the level of satisfaction for the person.
E)the person's income and the prices of the two goods.

Question

Quizplus · Accepted Answer

The shape of indifference curves depends on the degree of substitutability between the two goods. If the two goods are perfect substitutes, the indifference curve will be a straight line. If the two goods are complements, the indifference curve will be L-shaped. If the two goods are neither perfect substitutes nor complements, the indifference curve will be bowed inward. Prices and income levels affect the consumer's choice and can shift the indifference curve, but they do not determine the shape of the curve.

The Shape of a Person's Indifference Curves Between Two Goods