Question

51. An indifference curve which is drawn by taking economic bad commodity on both axis, will be (a) convex to the origin (b) concave to the origin (c) L-shaped (d) straight line​

Answer 1

Answer:

b) Concave to the origin

Answer 2

An indifference curve which is drawn by taking economic bad commodity on both the axes will be (b). concave to the origin.

• This is because as we move rightward satisfaction declines due to greater risk and to compensate for the decline in satisfaction due to greater risk and to keep the level of satisfaction constant, the rate of return (i.e., good’) has to be increased.