When Indifference Curves Are Bowed in Toward the Origin

question 224

Multiple Choice

When indifference curves are bowed in toward the origin,

• A) consumers are less inclined to trade away goods they are lacking.
• B) consumers' willingness to trade away goods they have in abundance diminishes.
• C) an increase in income will shift the indifference curve away from the origin.
• D) a decrease in income will shift the indifference curve away from the origin.

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Definitions:

Excise Taxes

Taxes imposed on specific goods, services, or transactions, often levied on items such as gasoline, tobacco, and alcohol.

Gasoline

A flammable liquid derived from petroleum, used mainly as fuel in most internal combustion engines.

Perfectly Inelastic

A situation where the quantity demanded or supplied of a good is unaffected by changes in its price.

Upward-Sloping

A term often used in economics to describe a graph line that represents an increase in one variable as another variable increases, typically applied to supply curves.