Question

If Marginal Rate of Substitution is constant throughout, the Indifference curve will be :(choose the correct alternative)

a. Parallel to the x-axis.
b. Downward sloping concave.
c. Downward sloping convex.
d. Downward sloping straight line.

Answer 1

Downward sloping straight line.

Assume that the marginal rate of substitution remains constant and the indifference curve would be a straight line sloping downward because of perfect substitution of goods. For example, Bru coffee is a perfect substitute for Nescafe coffee. Here, the consumer’s satisfaction would remain the same in the consumption of both Bru coffee and Nescafe coffee.