The slope of an indifference curve is negative.

1. Explain why the slope of an indifference curve would not be expected to be positive for economic "goods."

2. Explain why the MRS (which is the negative of the slope of an indifference curve) cannot be calculated for points E and F in Figure without additional information.

FIGURE Indifference Curve:

Curve U1 shows the combinations of hamburgers and soft drinks that provide the same level of utility to an individual. The slope of the curve shows the trades an individual will freely make. For example, in moving from point A to point B, the individual will give up two hamburgers to get one additional soft drink. In other words, the marginal rate of substitution Points below U1 (such as F ) provides less utility than points on U1. Points above U1 (such as E) provide more utility than U1.

Transcribed Image Text:

Hamburgers per week 6 4 3 2 0 A 2 B 3 №c E 4 5 6 D U₂₁ Soft drinks per week Hamburgers per week 6 4 3 2 0 A 2 B 3 №c E 4 5 6 D U₂₁ Soft drinks per week

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