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Commerce · Q398

Economics

Graduate and Post Graduate · Commerce · question 398

Q398

Normally shaped indifference curves are bowed towards the origin of the graph. The reason for this shape is

A.
The principle of diminishing marginal rate of relative price
B.
The diminishing marginal rate of substitution
Answer
C.
The marginal rate of substitution is constant along an indifference curve
D.
The indifference curves farther away from the origin represent higher levels of utility

Answer: Option B

Solution

Answer: Option B
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