Use the following to answer questions:
-(Table: Food and Clothing Bundles) Look at the table Food and Clothing Bundles. Teddy enjoys consuming food and clothing. The table shows five bundles of food and clothing that all provide Teddy with the same amount of utility. If units of food were put on a horizontal axis, what would we know about the shape of Teddy's indifference curve?
A) It is horizontal.
B) It is upward-sloping, with a declining marginal rate of substitution.
C) It is downward-sloping, with a constant marginal rate of substitution.
D) It is downward-sloping, with a declining marginal rate of substitution.

Question

Use the following to answer questions: 
-(Table: Food and Clothing Bundles) Look at the table Food and Clothing Bundles. Teddy enjoys consuming food and clothing. The table shows five bundles of food and clothing that all provide Teddy with the same amount of utility. If units of food were put on a horizontal axis, what would we know about the shape of Teddy's indifference curve?
A) It is horizontal. 
B) It is upward-sloping, with a declining marginal rate of substitution. 
C) It is downward-sloping, with a constant marginal rate of substitution. 
D) It is downward-sloping, with a declining marginal rate of substitution.

Quizplus · Accepted Answer

An indifference curve is typically downward-sloping, indicating that as Teddy consumes more of one good, he must consume less of the other to maintain the same utility. A declining marginal rate of substitution suggests that as Teddy consumes more food, he is willing to give up less clothing for additional food, which is a common characteristic of indifference curves.

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