Refer to Figure 4.3.Which diagram most likely represents the indifference map for a good and a "bad"?
A) A
B) B
C) C
D) D

Question

Refer to Figure 4.3.Which diagram most likely represents the indifference map for a good and a "bad"? 
A) A 
B) B 
C) C 
D) D

Quizplus · Accepted Answer

Indifference curves represent combinations of two goods that give a consumer the same level of utility or satisfaction. In diagram B, the indifference curves are shaped in a way that suggests one good is considered desirable (e.g. coffee) and the other is considered undesirable or a "bad" (e.g. spoiled food). This is because the curves are sloping downwards to the right, indicating that as more of the good is consumed, the quantity of the "bad" that the consumer is willing to accept decreases. Thus, diagram B is the most likely to represent an indifference map between a good and a "bad".