If Two Goods Are Both Desirable and Preferences Are Convex

question 9

Multiple Choice

If two goods are both desirable and preferences are convex, then

• A)there must be a kink in the indifference curves.
• B)indifference curves must be straight lines.
• C)if two bundles are indifferent, then an average of the two bundles is worse than either one.
• D)the marginal rate of substitution is constant along indifference curves.
• E)None of the above.

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Definitions:

Improper Fraction

A fraction where the numerator is greater than or equal to the denominator, representing a value greater than or equal to one.

Numerator

The top number in a fraction, indicating how many parts of a whole are being considered.

Tablespoon

A unit of measure used in cooking, equivalent to approximately 15 milliliters.

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An item or substance that is manufactured or refined for sale.