The prices of goods x and y are each $1. Jane has $20 to spend and is considering choosing 10 units of x and 10 units of y. Jane has nice convex preferences and more of each good is better for her. Where x is drawn on the horizontal axis and y is drawn on the vertical axis, the slope of her indifference curve at the bundle (10, 10) is -2.
A) The bundle (10, 10) is the best she can afford.
B) She would be better off consuming more of good x and less of good y.
C) She would be better off consuming more of good y and less of good x.
D) She must dislike one of the goods.
E) More than one of the above is true.
Correct Answer:
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