Q99
Which one is not a assumption of the theory of demand based on analysis of indifference curves?
A.
Given scale of preferences as between different combinations of two goods
B.
Diminishing marginal rate of substitution
C.
Constant marginal utility of money
AnswerD.
Consumers would always prefer more of a particular good to less of it, other things remaining the same
Answer: Option C
Solution
Answer: Option C
Solution:
Constant marginal utility of money is not a assumption of the theory of demand based on analysis of indifference curves. An indifference curve is a graph that shows a combination of two goods that give a consumer equal satisfaction and utility, thereby making the consumer indifferent.