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Indifference curves between income and leisure for an individual are generally:
- a)Concave to the origin
- b)convex to the origin
- c)Negatively sloped straight lines
- d)Positively sloped straight lines
Correct answer is option 'D'. Can you explain this answer?
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Indifference curves between income and leisure for an individual are g...
Indifference maps between income and leisure is have all the usual properties o/indifference curves. They slope downward to the right, are convex to the origin and do not intersect. They are positively sloped straight lines. Each indifference curve represents various alternative combinations of income and leisure which provide equal level of satisfaction to the individual and the farther away an indifference curve is from the origin, the higher the level of satisfaction it represents for the individual.
The slope of the indifference curve measuring marginal rate of substitution between leisure and income (MRSLM) shows the tradeoff between income and leisure. This trade-off means how much income the individual is willing to accept for one hour sacrifice of leisure time.
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Indifference curves between income and leisure for an individual are g...
Indifference curves between income and leisure for an individual are generally positively sloped straight lines. This means that as income increases, the individual is willing to give up more leisure time to maintain the higher income level.
Explanation:
• An indifference curve represents the different combinations of income and leisure that provide the same level of satisfaction or utility to an individual.
• The slope of an indifference curve represents the marginal rate of substitution (MRS), which is the rate at which an individual is willing to trade one good (leisure) for another (income).
• Since income and leisure are both desirable goods, the MRS between them is positive.
• If the MRS is constant along an indifference curve, the curve will be a straight line with a positive slope.
• This means that as income increases, the individual is willing to give up some leisure time to maintain the higher income level, and vice versa.
• However, if the MRS varies along the indifference curve, the curve will be curved, either concave or convex to the origin, depending on the shape of the MRS curve.
• Therefore, the correct answer is option D, positively sloped straight lines.
Explanation:
• An indifference curve represents the different combinations of income and leisure that provide the same level of satisfaction or utility to an individual.
• The slope of an indifference curve represents the marginal rate of substitution (MRS), which is the rate at which an individual is willing to trade one good (leisure) for another (income).
• Since income and leisure are both desirable goods, the MRS between them is positive.
• If the MRS is constant along an indifference curve, the curve will be a straight line with a positive slope.
• This means that as income increases, the individual is willing to give up some leisure time to maintain the higher income level, and vice versa.
• However, if the MRS varies along the indifference curve, the curve will be curved, either concave or convex to the origin, depending on the shape of the MRS curve.
• Therefore, the correct answer is option D, positively sloped straight lines.
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Indifference curves between income and leisure for an individual are g...
D
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Indifference curves between income and leisure for an individual are generally:a)Concave to the originb)convex to the originc)Negatively sloped straight linesd)Positively sloped straight linesCorrect answer is option 'D'. Can you explain this answer?
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