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what is an Indifferent Curve?
An Indifferent Curves is a curve that shows different combination of goods which give consumers the same utility/satisfaction
what are the four properties of indifferent curves?
1. Higher indifference curves are preferred to lower ones. 2. Indifference curves are downward-sloping. 3. Indifference curves do not cross. 4. Indifference curves are bowed inwards.
why is an indifferent curve downward-sloping?
If the quantity of one good decreases, the quantity of the other good must increase
Which of the following is a property of an indifference curve?
A. the marginal rate of substitution is constant as you move along an indifference curve.B. marginal utility is constant as you move along an indifference curve.
C. it is convex to the origin.
D. total utility is greatest where the 45 degree line cuts the indifference curve
C. It is convex to the origin
Indifference curves cannot
A. be L shaped
B. be straight lines
The curve that is traced out when we keep indifference curves constant and move thebudget line parallel to its original position is the?
Income consumption curve
The curve that is traced out when we keep indifference curves constant and swivel thebudget line at the Y-intercept to reflect a change the price of good X, is the?
price consumption curve for X
The curve that is traced out when we keep indifference curves and the total effective budgetconstant and only change the relative price of good X (i.e. slope of budget line) is the?
The substitution curve
What does the slope of an indifferent curve reveal?
It reveals that the marginal rate of substitution of one good for another good