Suppose that a consumer has the utility function U = 5A + 7B. If $A$ is measured on the horizontal axis
A) The indifference curves will be L-shaped.
B) The indifference curves will be horizontal.
C) The indifference curves will be straight lines with slope -5/7.
D) The indifference curves will be straight lines with slope -7/5.

Question

Quizplus · Accepted Answer

The slope of an indifference curve is equal to the ratio of the marginal utilities of the two goods. In this case, the marginal utility of A is constant at 5, while the marginal utility of B is constant at 7. Therefore, the slope of the indifference curve is -5/7, and the indifference curves will be straight lines with this slope.

Suppose That a Consumer Has the Utility Function U = AAA

Suppose That a Consumer Has the Utility Function U = $A$