Which one of the following is not the basic property of indifference curves ?
Indifference curves of imperfect substitutes are concave to the origin.
Under the usual assumptions of desirable goods and diminishing MRS, indifference curves are convex to the origin, not concave. They slope downward, distinct utility levels cannot intersect, and a higher curve represents greater satisfaction. The concavity statement is therefore the incorrect property.
Important Questions from Indifference curve analysis - Teaching
A consumer buys goods \(x\) and \(y\) at prices ₹4 and ₹2 per unit, respectively, with income ₹100. Preferences are smooth, monotonic and strictly convex, and the optimum is interior. Defining \(MRS_{xy}=MU_x/MU_y\), which pair of conditions must hold at the optimum?
Along a smooth, strictly convex indifference curve for two desirable goods X and Y, what happens to the positive marginal rate of substitution of X for Y as X consumption increases?
