Podcast
Questions and Answers
What is the primary purpose of an indifference curve in microeconomics?
What is the primary purpose of an indifference curve in microeconomics?
- To demonstrate the law of demand
- To analyze the production possibilities frontier
- To show the budget constraints of a consumer
- To illustrate the consumer's preferences for different combinations of goods (correct)
Why do indifference curves have a negative slope?
Why do indifference curves have a negative slope?
- Because they represent perfect complements
- As a result of diminishing marginal utility
- To show that the two commodities are substitutes for each other (correct)
- Due to the law of supply and demand
In microeconomics, why are indifference curves convex to the origin?
In microeconomics, why are indifference curves convex to the origin?
- To represent perfect substitutes
- To show that the two commodities are not perfectly substitutable (correct)
- Because averages are preferred over extreme values
- To display economies of scale
What does it mean when indifference curves do not intersect each other?
What does it mean when indifference curves do not intersect each other?
How does a negative slope of an indifference curve affect the quantities of goods consumed?
How does a negative slope of an indifference curve affect the quantities of goods consumed?
Why does an indifference curve being convex to the origin imply diminishing marginal rate of substitution (MRS)?
Why does an indifference curve being convex to the origin imply diminishing marginal rate of substitution (MRS)?
What happens if two indifference curves intersect in microeconomics?
What happens if two indifference curves intersect in microeconomics?
Why are averages preferred to extreme values on an indifference curve?
Why are averages preferred to extreme values on an indifference curve?
What does the negative slope of an indifference curve indicate about the commodities involved?
What does the negative slope of an indifference curve indicate about the commodities involved?
Why do indifference curves have a specific shape in microeconomics?
Why do indifference curves have a specific shape in microeconomics?
