Appendix: Indifference Curves

2. 13 Appendix:Indifference Curves CLICKER QUESTIONS

3. Appendix Checkpoint Question 1 Question 2 Question 3 Question 4 Question 5

4. APPENDIX CHECKPOINT Question 1 Adam’s indifference curve shows the combinations of goods which Adam _______. • prefers over all other combinations • places equal value on • can afford to buy • says are equally acceptable to him • believes have the same marginal rate of substitution

5. APPENDIX CHECKPOINT Question 2 Any combination on a higher indifference curve ____. • costs more than any combination on a lower indifference curve • is preferred to those on any lower indifference curve • costs less than any combination on a lower indifference curve • is less preferred to those on lower indifference curves • might be more, less, or equally preferred to any combination on a lower indifference curve

6. APPENDIX CHECKPOINT Question 3 The marginal rate of substitution for the good is _______. • equal to the consumer surplus • the same as the consumer’s relative price of the good • equal to the magnitude of the slope of the indifference curve • equal to the magnitude of the slope of the budget line • equal to 1.0 if the indifference curve is linear

7. APPENDIX CHECKPOINT Question 4 At her best affordable point, Kris ________. • is on her budget line • is on the highest attainable indifference curve • has a marginal rate of substitution equal to the relative price • i only • ii only • iii only • i and ii • i, ii, and iii

8. APPENDIX CHECKPOINT Question 5 When the consumer with the indifference map in the figure buys more DVDs, the marginal rate of substitution is of movies for DVDs ______. • remains the same • increases • decreases • might increase or decrease • equals the relative price of a DVD