Q. 105.0( 1 Vote )
Identify which of
Two regular convex to origin indifference curves can intersect each other. This statement is not true because indifference curves can never intersect.
An indifference curve is a graph showing a combination of two goods that give the consumer equal satisfaction and utility. Each point on an indifference curve indicates that a consumer is indifferent between the two and all points give him the same utility.
It is a straight line in the commodity space since it is a linear equation in x and y.
Equation is M̅ = px.x + py.y
Its slope is negative and is equal to − px/py. , the numerical slope of the budget line is px / which is equal to the ratio of the prices of X and Y.
If he doesn’t buy Y then Qy=0
If the price of Y falls, the consumer will buy more quantity of Y with the same amount of money. This would push Y-intercept of the Budget line away from the origin.
Rate this question :