Please explain

C113. Sometimes you consume things that are good (tasty food}, sometimes you are forced to consume things that are bad (excessive noise}. Some good or bad things are diminishing in their marginal effects (e.g. dessert is less appealing once you've had a few plates, the rain bothers you less once you're already soaked}, some are increasing, and some are constant. Consider the indifference curve below. What kinds of properties of X and l' could plausibly give rise to this indifference curve? (The first word in parentheses describes whether the object is good! bad, the second word is whether the absolute magnitude of the object's effect is diminishingfincreasingfconstant at the margin}. Y Il'l i. X is (good, constant} Y is (good, diminishing} ii. X is (bad, diminishing} Y is (good, increasing} iii. X is (good, constant} 1' is (bad, diminishing} iv. X is (good, diminishing} Y is (bad, increasing} A} (i.} 8. (ii.} 8. (iii.} 3. (iv.} 3} (i.} 3. (ii.} 3. (iii.} C} (i.} 3. (ii.} 3. (iv.} D} (i.} 3. (ii.} E} (i.} 3. (iii.} 3. (iv.} F} (i.} 3. (iii.} G} (i.} 3. (iv.} H} {L} I} (ii.} 3. (iii.} 3. (iv.} 1} (ii.} 3. (iii.} K] (ii.] 3. (iv.] L} (ii. M} (iii.} 3. (iv.} M} (iii.} 0} {IV-l P} None of (i} to (iv} Answer: K Source: This question comes from the week 5 tutorial sheet. Explanation: Because we are only given one indifference curve, it isn't obvious whether x or Y is good or bad. But given that the person is indifferent along IC1, we know that one ofthem is good