Normally shaped indifference curves are bowed towards the origin of the graph.The reason for this shape is
A) that indifference curves farther away from the origin represent higher levels of utility.
B) diminishing marginal rate of substitution.
C) the law of demand.
D) that the marginal rate of substitution is constant along an indifference curve.
E) the principle of diminishing marginal rate of relative price.

Question

Quizplus · Accepted Answer

Indifference curves are bowed towards the origin because of the diminishing marginal rate of substitution. This means that the slope of the curve decreases as we move downwards and to the right along the curve. As a result, more of one good must be given up to obtain additional units of the other good, leading to the convex shape of the curve.

Normally Shaped Indifference Curves Are Bowed Towards the Origin of the Graph.The