Question

Suppose Kim really enjoys studying economics, so he indeed derives his utility from studying the subject. On the other hand, studying mathematics always gives him disutility and headache. Draw his indifference curve that consists of hours of studying economics and mathematics (Econ-x axis, math-y axis).

Answer 1

Let us take economics on the x axis and maths on the y axis. If Kim enjoys economics, then he will get more utility from more consumption of it. On the other hand, more quantity of mathematics will give him disutility.

Now, Indifference curve shows the various combinations of a set of goods in such a way that he is indifferent among those bundles, or the level of satisfaction stays the same along one IC. Due to this, Kim will try to consume more and more of economics in order to compensate for more quantity of maths. This implies that Maths is a bad good for Kim and Economics is a good commodity for him.

Thus, IC comes out to be an upward sloping curve as shown in the diagram.