Asked by
Kiearra Pearson
on Dec 04, 2024Verified
If indifference curves cross, then:
A) the assumption of a diminishing marginal rate of substitution is violated.
B) the assumption of transitivity is violated.
C) the assumption of completeness is violated.
D) consumers minimize their satisfaction.
E) all of the above
Indifference Curves
A graph showing a series of lines that represent different bundles of goods between which a consumer is indifferent.
Diminishing Marginal
Refers to a principle where the marginal gain (such as utility or productivity) from an additional unit decreases as more units are consumed or produced.
Transitivity
Transitivity in decision-making implies that if a person prefers option A over B, and B over C, then the person should also prefer A over C, forming a consistent order of preferences.
- Dissect the representation of consumer likings through indifference curves and grasp how their delineation signals underlying theories regarding marginal rates of substitution.
Verified Answer
EK
Learning Objectives
- Dissect the representation of consumer likings through indifference curves and grasp how their delineation signals underlying theories regarding marginal rates of substitution.