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Difficulty: EasyIndifference Curves and Their Properties

Why does a standard indifference curve slope downward from left to right?

  1. To obtain additional units of one commodity, the consumer must give up some units of another commodity to maintain the same level of satisfaction.Answer
  2. B
    The marginal rate of substitution between the two commodities remains strictly constant along the curve.
  3. C
    Total utility drops to zero at the point where one commodity is substituted for another.
  4. D
    The total financial expenditure required to purchase the commodity combination increases continuously.

Answer

A standard indifference curve slopes downward from left to right because to obtain additional units of one commodity, the consumer must give up some units of another commodity to maintain the same level of overall satisfaction.
A standard indifference curve has a negative slope (downward from left to right) because both goods yield positive utility. If a consumer consumes more of one commodity, they must reduce their consumption of the other commodity so that total utility remains unchanged.

Step-by-Step Solution

1
Recall the definition of an indifference curve.
An indifference curve shows all combinations of two goods that give a consumer equal total satisfaction.
Knowing that satisfaction is constant along the curve is necessary to determine its slope.
2
Analyze the utility impact of increasing one good.
Consuming more of Good X increases satisfaction.
Both goods are assumed to have positive marginal utility (more is preferred to less).
3
Determine the required compensation in the other good.
To keep total satisfaction constant, consumption of Good Y must decrease, yielding a negative (downward) slope.
A gain in utility from one good must be offset by a loss in utility from the other good.

Key Concept

Negative Slope of Indifference Curves
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Topics

Indifference Curves and Their Properties

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