Question

The prices of goods x and y are each $1. Jane has $20 to spend and is considering choosing 10 units of x and 10 units of y. Jane has nice convex preferences and more of each good is better for her. Where x is drawn on the horizontal axis and y is drawn on the vertical axis, the slope of her indifference curve at the bundle (10, 10) is ���2.

Answer 1

Indifference curves show an individual's preferences for different combinations of goods and their willingness to trade one good for another while maintaining the same level of utility. Jane's indifference curve at the bundle (10, 10) has a slope of -2.

Step-by-step explanation:

Indifference curves illustrate the preferences of an individual with regard to different combinations of goods. These curves are downward-sloping and convex in shape. The slope of an indifference curve represents the marginal rate of substitution (MRS), which indicates the rate at which a person is willing to trade one good for another while maintaining the same level of utility. In this case, Jane has convex preferences, meaning more of each good is preferred, and the slope of her indifference curve at the bundle (10, 10) is -2.