If the marginal utility of each good is constant as consumption increases, the indifference curves are
A) horizontal.
B) vertical.
C) straight lines.
D) positively sloped.

Question

Quizplus · Accepted Answer

If the marginal utility of each good is constant as consumption increases, the indifference curves would be straight lines. This is because a constant marginal utility implies that the consumer is willing to trade the same amount of one good for a unit of the other good, and therefore the rate of substitution between the two goods is constant. This is reflected in the straight-line shape of the indifference curves.

If the Marginal Utility of Each Good Is Constant as Consumption