Which of the following statements are true?
i. higher indifference curves are preferred to lower ones
ii. indifference curves are always downwards sloping
iii. indifference curves are always bowed inwards (convex)
A)(i) and (ii) only
B)(ii) and (iii) only
C)(i) and (iii) only
D)(i), (ii) and (iii)

Question

Quizplus · Accepted Answer

Higher indifference curves represent higher utility levels, hence are preferred. Indifference curves slope downwards because to maintain the same level of utility, an increase in one good must be offset by a decrease in another. They are typically bowed inwards (convex to the origin) due to the diminishing marginal rate of substitution; as you consume more of one good, you are willing to give up less of the other good to get even more of the first good, reflecting a decreasing marginal rate of substitution.

Which of the Following Statements Are True