Question

True or False

1. Reflexivity, completeness, and transitivity axiom ensure that a consumer can compare one good with another.

2.More goods is preferable to less goods axiom of preferences implies that indifference curve should be downward sloping.

3. In comparing any two bundles of goods, the consumer prefers the one located on the indifference curve that is farthest from the origin.

4. A thick indifference curve violates transitivity axiom of preferences.

5. For a downward slopping linear demand curve, the elasticity of demand must be different at various points.

6. An indifference curve is a curve of combinations of goods that give the same utility.

Answer 1

1. True. Consumers are supposed to be able to prefer one good over another due to these axioms

2. True. So long as there's a fixed amount of utility that a consumer wants, they will substitute one good for another, resulting in a downward sloping indifference curve

3. True. The farther an indifference curve is from the origin, the higher is the amount of utility it implies for the consumer

4. True

5. False. A linear demand curve would imply same elasticity of demand at different points

6. True.