Why are indifference curves down sloping?
Please provide the best answer for the statement.
Indifference curves are down sloping because both products (A and B) yield utility to the consumer. More of both would increase utility, so for utility to remain constant, more of A means less of B and vice versa.
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If a tax cut increases people's labor supply, then
A) tax cuts increase potential GDP. B) tax cuts decrease aggregate demand. C) tax cuts decrease potential GDP because the real wage rate falls. D) tax cuts cannot affect aggregate demand. E) Both answers B and C are correct.
If the short-run Phillips curve shifts to the right, we can conclude that:
a. the trade-off between inflation and unemployment has improved over time. b. the trade-off between inflation and unemployment has worsened over time. c. the inflation rate associated with any given level of unemployment has declined. d. the unemployment rate associated with any given inflation rate has declined. e. the trade-off between inflation and unemployment has remained unchanged.