Spencer Zimmerman
New member
I dont understand this question at all. Mainly i dont understand how the indifference curves can be circles.
I care about only two things: scotch and Swiss chocolate bars. Consider my utility function and indifference curves. My utility function looks like a mountain such that my indifference curves are circles; consumption of both commodities is positive at the mountain's peak. Which of the following statements best represents my preferences?
A) At low levels of consumption scotch and chocolate are both bad but at high levels they are both goods
B). At low levels of consumption scotch and chocolate are both goods but at high levels of consumption they are both bads
C) Scotch is a bad and chocolate switches from a bad to a good at high levels of consumption
D) None of the above
Im pretty sure its B, but i have no idea why.
I care about only two things: scotch and Swiss chocolate bars. Consider my utility function and indifference curves. My utility function looks like a mountain such that my indifference curves are circles; consumption of both commodities is positive at the mountain's peak. Which of the following statements best represents my preferences?
A) At low levels of consumption scotch and chocolate are both bad but at high levels they are both goods
B). At low levels of consumption scotch and chocolate are both goods but at high levels of consumption they are both bads
C) Scotch is a bad and chocolate switches from a bad to a good at high levels of consumption
D) None of the above
Im pretty sure its B, but i have no idea why.