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Economics Homework Four Answers - Student Fourteen (view source)
Revision as of 23:50, October 10, 2009
, 23:50, October 10, 2009no edit summary
'''5. Explain why the shape of an indifference curve for two goods that are perfect substitutes is a straight line going from the upper left down to the lower right. Extra credit: why must its slope be negative 1?
'''5. Explain why the shape of an indifference curve for two goods that are perfect substitutes is a straight line going from the upper left down to the lower right. Extra credit: why must its slope be negative 1?
'''
'''
Because both are perfect substitutes for each other, they are both equally preferred. Extra credit: The slope must be negative one in order to substitute one good for another.
Because both are perfect substitutes for each other, they are both equally preferred.
'''6. Describe either the "income effect" or the "substitution effect." Take your pick:'''
'''6. Describe either the "income effect" or the "substitution effect." Take your pick:'''