Question

You are measuring level of consumption of a good commodity on the X-axis and that of a bad commodity on the Y-axis. The indifference curve is ............

• A. parallel to the X-axis
• B. parallel to the Y-axis
• C. of “inverted-U” shape
• D. having a positive slope

Hint:

When dealing with a bad commodity on the Y-axis, the indifference curve will have a positive slope, indicating a trade-off where the consumer consumes more of the bad as they increase consumption of the good.

Answer 1

The Correct Option is D

Step 1: Understand the concept of indifference curve.
An indifference curve represents all combinations of two goods that give the consumer the same level of satisfaction or utility. The shape of the indifference curve depends on whether the goods are substitutes or complements.
Step 2: Analyze the given scenario.
In this case, one good is placed on the X-axis and a bad commodity on the Y-axis. For bad commodities, the consumer prefers to have less of them. The indifference curve for such commodities would slope positively, meaning that if the consumer consumes more of the good (on the X-axis), they would need to consume more of the bad (on the Y-axis) to remain equally satisfied.
Step 3: Answer explanation.
- Option (A) is incorrect because the indifference curve would not be parallel to the X-axis as we expect a trade-off between the two commodities.
- Option (B) is incorrect because an indifference curve parallel to the Y-axis would suggest no change in the consumer's satisfaction level with respect to changes in the Y-axis good, which isn't typical when dealing with bad commodities.
- Option (C) is incorrect because the "inverted-U" shape does not apply in this case.
- Option (D) is correct because, in the case of a bad commodity on the Y-axis, the indifference curve typically has a positive slope. The consumer prefers more of the good on the X-axis and will tolerate more of the bad on the Y-axis to maintain satisfaction.
Final Answer: \[ \boxed{\text{having a positive slope}} \]