Question

Indifference curves are convex to the origin because of ______.

Options

• Increasing MRS

• Decreasing MRS

• Constant MRS

• Diminishing MU

Answer 1

Indifference curves are convex to the origin because of decreasing MRS.

Explanation:

As a consumer gets more units of Good X, their desire for it falls, making them willing to sacrifice fewer and fewer units of Good Y for each additional unit of X. This diminishing sacrifice causes the slope of the curve to flatten out as it moves rightward, bending inward toward the origin.