10 Questions
What is the primary purpose of an indifference curve in microeconomics?
To illustrate the consumer's preferences for different combinations of goods
Why do indifference curves have a negative slope?
To show that the two commodities are substitutes for each other
In microeconomics, why are indifference curves convex to the origin?
To show that the two commodities are not perfectly substitutable
What does it mean when indifference curves do not intersect each other?
The consumer is indifferent between different points on each curve
How does a negative slope of an indifference curve affect the quantities of goods consumed?
Increase in one good while decreasing the other
Why does an indifference curve being convex to the origin imply diminishing marginal rate of substitution (MRS)?
Diminishing MRS reflects a decreasing rate at which a consumer is willing to trade one good for another
What happens if two indifference curves intersect in microeconomics?
The consumer's preferences become inconsistent
Why are averages preferred to extreme values on an indifference curve?
As it reflects consumer's preference towards balanced consumption
What does the negative slope of an indifference curve indicate about the commodities involved?
They are substitutes for each other
Why do indifference curves have a specific shape in microeconomics?
To illustrate consumer preferences and choices
This quiz covers the properties of preferences in microeconomics, including Completeness, Transitivity, Monotonicity, and Reflexive Behavior. It also discusses the concept of Ordinal Utility and its assumptions.
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