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Which of the following is not true about indifference curves? A. Indifference curves show...

Question:

Which of the following is not true about indifference curves?

A. Indifference curves show equally preferred combinations of two goods.

B. Indifference curves slope downward.

C. Indifference curves are not straight lines because the marginal rate of substitution falls.

D. Indifference curves shift when prices change.

Indifference Curves

Indifference curve is the locus of different combinations of two goods with constant utility. Every point on ICs gives same utility. ICs are used to represent consumer preferences. A rational consumer will always consume a bundle on IC because any point below and above the IC are achievable. Any point below the IC will give the consumer lesser utility than the bundle on the IC while the bundle above the IC is not achievable due to financial constraints.

Answer and Explanation: 1

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Option (d) is correct.

The statement that indifference curves shift when prices change is false.

It is the budget line that shifts when there is...

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Indifference Curves: Use & Impact in Economics

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Chapter 3 / Lesson 12
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In economics, indifference curves show which goods in the marketplace bring equal satisfaction to consumers, leaving them indifferent to which goods they purchase. Explore the definition, learn about their use and impact in economics, and review how they work.


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