The shape of the indifference curve depends on
A)the relative price of good Y.
B)the level of happiness for the household.
C)the substitutability between goods for the household.
D)the family income.
E)the price of goods.

Question

Quizplus · Accepted Answer

The shape of the indifference curve depends on the degree of substitutability between goods for the household. This is because the curve represents the combinations of two goods that give the same level of satisfaction or utility to the consumer. If the goods are perfect substitutes, the curve will be linear, while if they are perfect complements, the curve will be L-shaped.

The Shape of the Indifference Curve Depends on