A consumer treats one-kg packets of salt of brand X and brand Y as equally good. She is indifferent among the following combinations.
| Combination | Packets of brand X | Packets of brand Y |
|---|---|---|
| A | 1 | 7 |
| B | 2 | 6 |
| C | 3 | 5 |
| D | 4 | 4 |
Which of the following is correct?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → The MRS stays at 1, so the indifference curve is a straight line.
Each extra packet of brand X replaces one packet of brand Y, so the MRS stays at 1, as with perfect substitutes.
Option (1) The MRS falls from 7 to 4, so the indifference curve is convex to the origin. — Incorrect. 7 to 4 are packets of Y.
Option (2) The MRS stays at 1, so the indifference curve is convex to the origin. — Incorrect. A convex curve needs a falling MRS.
Option (3) The MRS rises as she gets more packets of brand X, so the indifference curve is concave. — Incorrect. The MRS does not rise.
Option (4) The MRS stays at 1, so the indifference curve is a straight line. — Correct. A constant slope gives a straight line.
NCERT (2026-27): “Shape of an Indifference Curve It may be mentioned that the law of Diminishing Marginal Rate of Substitution causes an indifference curve to be convex to the origin. This is the most common shape of an indifference curve. But in case of goods being perfect substitutes4, the marginal rate of substitution does not diminish. It remains the same. …” “… For the consumer, it hardly matters whether she gets a five rupee coin or a five rupee note. So, irrespective of how many five rupee notes she has, the consumer will sacrifice only one five rupee coin for a five rupee note. So these two commodities are perfect substitutes for the consumer and indifference curve depicting these will be a straight line. …” |