Indifference curves are convex to the origin because of O A

Indifference curves are convex to the origin because of: O A. the assumption of a dirminishing marginal rate of substitution. O B. transitivity of consumer preferences. O C. the assumption that more is preferred to less. O D. the assumption of completeness. O E. none of the above Cick to select your answer

Solution

Answer - the assumption of diminishing marginal rate of substitution.

Reason - indifference curve is a combination of two goods which offers a consumer same level of satisfaction making him indifferent across all combinations. The slope of indifference curve declines because the rate at which the consumer substitutes one commodity for the other tends to decline. This is called declining marginal rate of substitution. We can understand by another way also, as it\'s a monotonic preference of consumer which says that increase of consumption of a good always leads to higher satisfaction. Accordingly, more of one good must be combined with less of another good. So that the satisfaction level remains constant at all points of indifference curve. So again the diminishing marginal rate of substitution prevails and makes the indifference curve convex to the origin.

If the answer helped, please give it a thumbs up. Thank you.