Answer to Question #167895 in Microeconomics for Eric Opoku

Question

Starting with a given equal endowment of good 

X and good Y by individual A and individual B, draw

A’s and B’s indifference curves on the same set of

axes, showing that individual A has a preference for

good X over good Y with respect to individual B.

b. Explain why you drew individual A’s and individual B’s

indifference curves as you did in Problem 3(a).

Answer 1

Increasing MRS is associated with concave indifference curves. As consumer consumes more of good X , slope of indifference curve gets steeper and steeper.

When both individual have equal initial endowment of good X and good Y . And individual A prefers X over Y then his IC lies more toward X-axis. And individual B , IC lies more tpward Y-Axis.