Question

Indifference curves are

• A. Concave
• B. Convex
• C. Neither concave nor convex but simply polynomial curves
• D. Always straight lines

Hint:

Remember that convexity is the graphical representation of a diminishing Marginal Rate of Substitution.

Answer 1

The Correct Option is B

Step 1: Understanding the Concept:
An indifference curve represents combinations of two commodities that provide equal utility to a consumer.

Step 2: Detailed Explanation:
Under standard consumer theory, indifference curves are convex to the origin.
This convexity arises due to the Law of Diminishing Marginal Rate of Substitution (MRS).
As the consumer obtains more units of a good, they are willing to give up fewer units of the alternative good to maintain the same satisfaction level.
This results in an origin-convex curve.

Step 3: Final Answer
The correct option is (B).