For a smooth indifference curve between two desirable goods, which assumption explains convexity to the origin and a declining absolute slope as the consumer moves rightward?
(A) Diminishing marginal utility alone
(B) Diminishing marginal rate of substitution between the goods
(C) Diminishing marginal rate of technical substitution between inputs
(D) Merely using ordinal measurement of utility
(E) Diminishing marginal utility of money alone
(B) only
Diminishing marginal rate of substitution means the consumer gives up progressively less of one good for an additional unit of the other while remaining indifferent. This explains the declining absolute slope and convexity. Ordinal utility is a way of representing preferences, not a sufficient cause of that curvature; technical substitution concerns production inputs.
Important Questions from Indifference curve analysis
In the case of two production-inputs. which one of the following is not a property of Isoquants (the production indifference curves)?
Indifference curve theory states that:
What is constant along an indifference curve?
(1) Level of Utility
(2) Level of Output
(3) Level of Price- Which one of the following is not the basic property of indifference curves ?
- An indifference curve measures ____________ level of satisfaction derived from different combinations of commodity X and Y.
