Along an Indifference Curve

question 73

Multiple Choice

Along an indifference curve,

• A) the consumer prefers some of the consumption points to others.
• B) the marginal rate of substitution is equal to 0.
• C) the marginal rate of substitution is constant but not equal to zero.
• D) the consumer does not prefer one consumption point to another.

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Definitions:

Inferior Goods

Goods for which demand decreases as the income of the consumer increases, opposite to normal goods.

Normal Goods

Goods for which demand increases as consumers' income increases, holding all other factors constant.

Cross-Price Elasticity

A measure of how the quantity demanded of one good changes in response to a price change of another good.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price in a specific period.