3. \"Regular-looking indifference curves ones you may be familiar with from prev

Question

3. "Regular-looking indifference curves ones you may be familiar with from previous econ courses typically have the following characteristics. For each characteristic, explain which of the axioms (Al , A2, A3. A4, A 4, Ay, A5) is responsible for that property. (a) Infinite numbers of indifference curves cover the entire area R (b) Indifference curves never interseet. (c) Indifference curves are (weakly) downward sloping (ie. not positively sloped). (d) Indifference curves are bent towards the origin.

Explanation / Answer

a) Infinite number of indifference curves cover the entire area Rn+= Axiom responsible for this property is Axiom 4 as it shows that consumer places positive values on more consumption.

b) Indifference curves(IC) never intersect= Axiom responsible for this property is 3 as it is an axiom of continuity and a good cannot have different utilities if consumption is same.

c) Indifference curves are downward sloping=Axiom responsible for this property is Axiom 5 as it is an axiom of diminishing marginal returns

d) IC are bent towards origin:=Axiom responsible for this property is axiom 2 (transitivity) as consumers are consistent in their preference.

Related Questions

Navigate

• Browse (All)
• Browse 3
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.