The marginal rate of substitution (MRS) at point A is greater than at point B. All indifference curves for a person cross at least one other indifference curve for that person. Each person has an infinite number of indifference curves. IC2 and IC3 could belong to different people. Different people have differently shaped indifference curves. ICI shows a preference for ketchup over mustard.

The marginal rate of substitution (MRS) at point A is greater than at point B. All indifference curves for a person cross at least one other indifference curve for that person. Each person has an infinite number of indifference curves. IC2 and IC3 could belong to different people. Different people have differently shaped indifference curves. ICI shows a preference for ketchup over mustard.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

ChapterB: Indifference Curves

Section: Chapter Questions

Problem 5RQ: Exercise B5 How can you tell which indifference calves represent higher or lower levels of utility?

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