Answer to Question #298566 in Microeconomics for LOUISA

Question

If an indifference curve is convex from above (bowed out), which of the following statements would be true

1.

The more you have of a good, the less you desire additional units of the good.

2.

The less you have of a good, the more intense your desire for more of it.

3.

The more you have of a good, the more intense your desire for more of it.

4.

This type of indifference curve violates the more-is-better-than-less assumption

underlying indifference curves.

Answer 1

If an indifference curve is convex from above (bowed out), the more you have of a good, the less you desire additional units of the good.

Therefore the true statement is statement 1.