Chapter EMD, Problem 1MCQ

To determine

The correct option where an individual’s indifference curve is for ordinary goods.

Answer to Problem 1MCQ

From the available options, the correct option is the individual is indifferent between any two points.

Explanation of Solution

As any two points on an individual’s indifference curve for ordinary goods will have the same degree of total utility for him/her, therefore he/she has no preferences between any two points which mean an individual’s indifference curve for ordinary goods would be between any two points.

The slope of an individual’s indifference curve for ordinary goods cannot be constant as he/she made differences in their level of satisfaction and therefore total utility cannot change. It does not matter here in this case whether the person cares about an increase or decrease in utility and the slope would not be equal to the proportion of the price that they consume.

Therefore, the correct option is c (the individual is indifferent between any two points) and all other options are incorrect.

Economics Concept Introduction

Introduction: A good which causes a rise in the quantity desired when its price falls or, in the opposite case, a fall in quantity demanded when its price rises are called ordinary goods.