If two goods are both desirable and preferences are convex, then
A)there must be a kink in the indifference curves.
B)indifference curves must be straight lines.
C)if two bundles are indifferent, then an average of the two bundles is worse than either one.
D)the marginal rate of substitution is constant along indifference curves.
E)None of the above.

Question

Quizplus · Accepted Answer

Convex preferences imply that a consumer prefers averages (mixes) of bundles to extremes, which does not necessarily lead to kinks, straight lines, a worse average, or constant marginal rates of substitution along indifference curves. These characteristics are not implied by convex preferences alone.

If Two Goods Are Both Desirable and Preferences Are Convex