Explain how indifference curves can never cross.

Mrs. Griffiths earns $5000 a week and spends her entire income on dresses and handbags, since these are the only two items that provide her utility. Furthermore, Mrs. Griffiths insists that for every dress she buys, she must also buy a handbag.  Draw an indifference curve showing the optimum choice. Label the optimum as point A. What would be the marginal rate of substitution at the point that corresponds to the optimal consumption choice? Interpret the marginal rate of substitution

Consider that Pepsi (P) and Coke (C) are perfect substitutes. Draw the graph of an indifference map for P (horizontal) and C (vertical), and explain why the indifference curves have that shape.

Indifference curves slopes down because there is a tradeoff between goods. If you give up some of one good, you must receive less of another in order to remain indifferent. True False