Indifference Curves Are Convex to the Origin Because Of

question 21

Multiple Choice

Indifference curves are convex to the origin because of:

• A) transitivity of consumer preferences.
• B) the assumption of a diminishing marginal rate of substitution.
• C) the assumption that more is preferred to less.
• D) the assumption of completeness.
• E) none of the above

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Definitions:

Budget Constraint

A budget constraint represents the combinations of goods and services that a consumer can purchase given their income and the prices of those goods and services.

Weekly Income

The total earnings received by an individual or household within a week, encompassing all sources of income such as wages, salaries, bonuses, and any other income.

Doughnuts

Doughnuts are a type of fried dough confectionery or dessert food, often circular with a hole in the center, but can come in various shapes and sizes.

Coffee

A beverage made from the roasted and ground beans of the Coffea plant, known for its stimulating effects due to caffeine.