Question

Which of the following statements is not true of indifference curves?

a. They are usually smooth
b. They have a slope that equals MRT
c. They can't cross
d. They are downward slopin

Answer 1

Indifference curves have a downward sloping shape and are convex with respect to the origin. The slope along an indifference curve represents the marginal rate of substitution.

Step-by-step explanation:

Indifference curves have a roughly similar shape in two ways: 1) they are downward sloping from left to right; 2) they are convex with respect to the origin. In other words, they are steeper on the left and flatter on the right. The downward slope of the indifference curve means that Lilly must trade off less of one good to get more of the other, while holding utility constant. Thus, the marginal utility that Lilly would gain from increasing her consumption of books from two to three must be equal to the marginal utility that she would lose if her consumption of doughnuts was cut, so that her overall utility remains unchanged. Indeed, the slope along an indifference curve is the marginal rate of substitution, which is the rate at which a person is willing to trade one good for another so that utility will remain the same.