The firm manager with indifference curves which are convex from the origin (output on the horizontal axis and profit on the vertical axis)views:
A) only profits to be "goods."
B) only outputs to be "goods."
C) both profits and outputs to be "goods."
D) None of the preceding statements is correct.

Question

Quizplus · Accepted Answer

In the context of indifference curves convex from the origin, where output is on the horizontal axis and profit is on the vertical axis, the firm manager views both profits and outputs as "goods." This is because the convexity implies a positive relationship between output and profit, indicating that increases in either are valued by the firm.

The Firm Manager with Indifference Curves Which Are Convex from the Origin