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Sergeu [11.5K]
2 years ago
5

Suppose that Kat likes arrows and food. Kat's potential indifference curves for these two goods are shown. Some of these curve

English
1 answer:
crimeas [40]2 years ago
8 0

Suppose that Kat likes arrows and food. Kat's potential indifference curves for these two goods are shown. For each of the accompanying graphs, the diminishing marginal utility for the indifference curve is violated.

          Due to diminishing marginal utility, when food prices rise per unit, the units of arrows lost tend to decrease over time.

          However, in the first graph, we can observe that while food consumption increases per unit, the consumer's loss in arrows consumption increases with time.

          As a result, the premise and assumption of diminishing marginal utility are broken and violated in this case. The assumption informs us that the indifference curve must be curved outward towards the origin.

         The second graph shows that when consumption of both items increases, the customer receives the same utility since utility remains constant throughout the indifference curve.

          As a result, the assumption that more good is better than less is violated, because based on this assumption, as consumption of both items increases, so does the utility gained by the consumer, which does not hold in this situation, rather the reverse is true.

Therefore, we can conclude that for each of the accompanying graphs, the indifference curve assumption is violated in both graphs.

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