Question

# I only need the answer, not the work. Nancy is taking a course from Professor Goodheart...

I only need the answer, not the work.

Nancy is taking a course from Professor Goodheart who will count only her best test grade and from Professor Stern who will count only her worst test grade. In one of her classes, Nancy has scores of 20 on her first testand 70 on her second midterm. When the first test score is measured on the horizontal axis and her second test score on the vertical, her indifference curve has a slope of zero at the point (20, 70). Therefore this class could

not be either Professor Goodheart’s or Professor Stern’s.

be either Professor Goodheart’s or Professor Stern’s.

be Professor Goodheart’s but could not be Professor Stern’s.

be Professor Stern’s but could not be Professor Goodheart’s.

Option C

be Professor Goodheart's but could not be Professor Stern's is correct.

The reason is that the indifference curve has a slope equal to zero when the marginal rate of substitution is equal to zero. The marginal rate of substitution is zero when Nancy scores 20 marks in each of the subject. In this situation, she scores 70 marks in one of the subject, which must belong to Professor Goodheart as he counts Nancy's best mid term grade.

Indifference curve refers to the curve which represents the preferences of an individual. The slope of indifference curve is known as Marginal Rate of Substitution (MRS). An indifference curve of normal goods is downward sloping and convex to the origin.