If an Indifference Curve Has a Kink, Then

question 67

Multiple Choice

If an indifference curve has a kink, then:

• A)the indifference curve is not convex to the origin.
• B)the marginal rate of substitution is a meaningless concept.
• C)preferences are normal.
• D)the marginal rate of substitution is undefined at the kink.

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Definitions:

Limbic System

A complex system of nerves and networks in the brain, involved in instincts and emotions such as fear, pleasure, and happiness.

Lithium

A chemical element used as a medication to treat mood disorders, such as bipolar disorder, by stabilizing mood swings.

Euphoria

A feeling of intense excitement and happiness.

Lethargy

A state of sluggishness, drowsiness, or lack of energy, often as a symptom of a medical condition or psychological state.