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An indifference curve is always :
Concave to the origin
Convex to the origin
L-shaped
A vertical straight line
- Option 1: Concave to the origin
Indifference curves are usually not concave. A concave curve would suggest increasing marginal rates of substitution, which is inconsistent with consumer preference theory.
- Option 2: Convex to the origin
Indifference curves are typically convex to the origin. This shape reflects diminishing marginal rates of substitution, meaning as you consume more of one good, you'll need more of it to offset a decrease in the other good.
Answer: This is the correct option.
- Option 3: L-shaped
L-shaped indifference curves occur with perfect complements. With perfect complements, goods are consumed in fixed proportions, and preferences result in an L-shape.
- Option 4: A vertical straight line
A vertical line would imply that quantity of one good can change without affecting utility, which contradicts the concept of an indifference curve as it assumes preferences between two goods.
By: santosh ProfileResourcesReport error
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