Question

Indifference curves are convex, or bowed toward the origin, because

• A. each indifference curve represents a constant, but different level of utility.
• B. they are not allowed to intersect one another.
• C. they are downward sloping high level of indifference curve provide higher marginal utility.
• D. of diminishing marginal utility

Hint:

Combine the profitable-to-produce rule with the shutdown-point condition.

Answer 1

The Correct Option is D

Indifference curves are convex because of a diminishing Marginal Rate of Substitution (MRS): as a consumer gives up units of one good in exchange for more of another while keeping their total utility unchanged, they become willing to give up progressively smaller amounts of the first good for each extra unit of the second.
This diminishing MRS traces back to the more basic principle of diminishing marginal utility, since a consumer who already has plenty of a good gets progressively less extra satisfaction from each additional unit, making them less willing to trade the other good away for it.
So option 4 is correct.