Indifference Curves Are Downward Sloping Because of the Assumption of

question 39

Multiple Choice

Indifference curves are downward sloping because of the assumption of

• A)completeness.
• B)transitivity.
• C)more is better.
• D)All of the above.

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Definitions:

Utility Function

A mathematical representation of how consumers rank different bundles of goods or services according to their level of satisfaction or utility.

Budget Constraint

The limitation on the consumption bundles that a consumer can afford given their income and the prices of goods.

Optimum Market Basket

The combination of goods and services that maximizes a consumer’s utility for a given income and prices, representing the most preferred point on their budget line.

Indifference Curves

Graphical representations in microeconomics showing combinations of two goods that give a consumer equal satisfaction and utility.