Question

Indifference curve is:

Options

• Downward sloping, concave to the origin

• Downward sloping, convex away from the origin

• Downward sloping, convex to the origin

• Downward sloping, concave away from the origin

Answer 1

Downward sloping, convex to the origin

Explanation:

Because of the diminishing marginal rate of substitution, an indifference curve is convex to the origin. It is downward sloping because when one good's amount is reduced, the quantity of the other good rises. As a result, an indifference curve is convex to the origin and slopes downhill.