Assuming that good "x" is measured on the x-axis and good "y" is measured on the y-axis,if the utility for the two goods "x" and "y" can be measured as U = y,then it can be concluded that
A) "x" and "y" are perfect complements.
B) "x" is a "bad".
C) the indifference curves on the x,y graph are upward sloping.
D) the indifference curves on the x,y graph are horizontal.

Question

Quizplus · Accepted Answer

The utility function U = y indicates that the consumer's utility depends only on the quantity of good y, and not on the quantity of good x. This means that changes in the quantity of x do not affect the consumer's utility. Therefore, indifference curves, which represent combinations of x and y that give the consumer the same level of utility, will be horizontal lines. Horizontal indifference curves imply that the consumer's utility changes only with changes in y, not x.

Assuming That Good "X" Is Measured on the X-Axis and Good