Question

Which property of indifference curves holds only weakly for perfect substitutes utility? a. None - they...

Which property of indifference curves holds only weakly for perfect substitutes utility?

a. None - they all hold strongly

b. Convexity

c. Non-crossing

d. Monotonicity

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Answer #1

The perfect substitutes utility function is represented by straight line indifference curves which follows the monotonicity principle as marginal utilities of both goods are positive. Also it obeys non-crossing principle as straight line indifference curves do not intersects each other. But in case of perfect substitutes utility function, we do not get convex indifference curves but we get straight line indifference curves, hence the preferences are weakly convex but not strongly convex. Hence the answer will be:

b. Convexity

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