Consider the indifference map in the figure below: Which of the four basic assumptions about consumer preferences are violated by this indifference map?
A)More is better than less
B)Transitivity
C)Diminishing MRS
D)A and B are correct.
E)A and C are correct.

Question

Consider the indifference map in the figure below:  Which of the four basic assumptions about consumer preferences are violated by this indifference map?
A)More is better than less 
B)Transitivity 
C)Diminishing MRS 
D)A and B are correct. 
E)A and C are correct.

Quizplus · Accepted Answer

The indifference map violates the assumption of diminishing MRS because the slope of the indifference curves is constant and not getting flatter as we move down and to the right. The assumption of more is better than less is not violated, as each indifference curve represents a higher level of utility. The assumption of transitivity cannot be determined from the given information.

Consider the Indifference Map in the Figure Below: Which