Consider the indifference curve map for nickels and quarters. Assume nickels are on the horizontal axis and quarters are on the vertical axis. The indifference curves for nickels and quarters are
A)straight lines with slope of −1/5.
B)straight lines with a slope of −1.
C)straight lines with a slope of −5.
D)L shaped.

Question

Quizplus · Accepted Answer

The slope of the indifference curve represents the rate at which a consumer is willing to substitute one good for another while maintaining the same level of utility. Since a quarter is worth 5 nickels, the slope is -1/5, indicating that the consumer is willing to give up 1 quarter for 5 nickels.

Consider the Indifference Curve Map for Nickels and Quarters