Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Theory of Consumer behaviour

Question:

Which of the following are true-
In ordinal approach,
a) Downward sloping Indifference Curve means to gain more units of good Y a consumer is willing to sacrifice units of good X, to keep the total satisfaction constant .
b) Convexity of Indifference Curve means, to consume an additional unit of good X, a consumer will be willing to sacrifice more and more of good Y.

Options:

Both a and b are true

a is true, b is not

b is true, a is not

Both a and b are false

Correct Answer:

a is true, b is not

Explanation:

Convexity of IC means, to consume an additional unit of good X, a consumer will be willing to sacrifice less and less of good Y. The reason for a convex IC is "Diminishing marginal rate of substitution".