96.9k views
2 votes
Using preference curve, explain when an economy is said to be trapped


1 Answer

3 votes

Indifference curves are used to demonstrate how a consumer makes his choice between different goods according to the utility that he attributes them.

Indifference represents the points where a consumer exchanges quantities of good A for good B, and its utility does not change.

The economy will be trapped when consuming it is no longer consuming goods, or at least not in a way that exceeds production demand

User Analizer
by
3.2k points