Neas-Seminars

curves never cross curves are not always parallel?


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By lnExp - 8/5/2008 10:28:18 PM

Question 3.1: Indifference Curves

All but which of the following are true regarding indifference curves?

An indifference curve is a locus of points that are equally desirable to the consumer.

Indifference curves for a single consumer cannot cross.

Indifference curves for a single consumer are always parallel.

A single consumer has an infinite number of indifference curves.

Indifference curves for two goods are downward sloping.



Answer 3.1: C

Know the four attributes of indifference curves in A, B, D, and E, and know that indifference curves are not necessarily parallel.

About this question, I felt that all choice statement are true.

Considering the truth that all curves should never cross each other, it does mean that all curves should be parallel all the time, otherwise, there exist some points in the plane which 2 of curves cross each other.

Why C is false?
By NEAS - 8/12/2008 11:41:27 AM

A good example is Y = 1/X and Y = 2/X.

The curve do not cross (because 1 does not equal 2), but they are not parallel.

[NEAS: Correct; one can make up dozens of examples.]