Chapter EMD, Problem 1FRQ

A

To determine

To draw: K’s indifference curve.

Explanation of Solution

Quantity of songs	Quantity of movies
0	8
1	6
2	4
3	2
4	0

  

As per the given table, the quantity of movies is plotted on the x-axis, and the quantity of songs is plotted on the y-axis. Thus, a downward-sloping indifference curve is formed.

Economics Concept Introduction

Introduction:

Indifference curve is defined as a chart depicting various combinations of two commodities or goods that leave the consumer equally satisfied or equally well off.

B

To determine

To state: 2 properties that each indifference curve for ordinary goods represents.

Explanation of Solution

The 2 properties that each indifference curve for ordinary goods represents are:

1. Negative slope: that is it is downward sloping. That is with an increase in the good on the y-axis, the good on the x-axis would decrease.
2. Convex shape: is represented by a line with a slope that decreases in value from left to right.

Economics Concept Introduction

Introduction:

Indifference curve is defined as a chart depicting various combinations of two commodities or goods that leave the consumer equally satisfied or equally well off.

C

To determine

To state: Is k’s indifference curve depicting the 2 properties that are named in part b?

Explanation of Solution

The 2 properties that each indifference curve for ordinary goods represents are:

1. Negative slope: K’s indifference curve depicts a negative slope. As more movies are downloaded, then song downloads should be less in order to provide K with the same utility as before. So, this trade-off of more of a good and less of another gives the indifference curve a negative slope.
2. Convex shape: k’s indifference curve does not have a convex shape. K’s Ic curve is a straight line with a constant slope, instead of being a convex line with a slope that decreases in value from left to right.

Economics Concept Introduction

Introduction:

Indifference curve is defined as a chart depicting various combinations of two commodities or goods that leave the consumer equally satisfied or equally well off.