What is an indifference curve? Can two indifference curves intersect? Explain your answer
What will be an ideal response?
All bundles of goods along an indifference curve are equally preferred. Each indifference curve shows a different level of satisfaction. If two indifference curves intersect, this means that at the point of intersection, the same bundle of goods leads to two different levels of satisfaction. Since this is not logically possible, indifference curves cannot intersect. The higher the indifference curve, the higher the level of satisfaction.
A
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The availability of substitutes makes the demand for a good less elastic
Indicate whether the statement is true or false
The term economists use to describe a situation in which the economy's overall price level is rising is
a. growth. b. inflation. c. recession. d. expansion.