Hi, im really in severe need of help with this question for my microeconomics coursework thats due next week and would really appreciate any help
Q. Suppose one of the two goods is a bad. What do you think this implies about the shape of the indifference curves? ( i think that this part is an indifference curve that slopes upwards from left to right ) Distinguish between two cases :
when the individual is forced to consume the goods whether they like them or not
and when the individual can costlessly throw away any of the goods they do not like.
Indifference curves (help) Watch
- Thread Starter
- 10-12-2010 18:24
- 10-12-2010 20:26
ICs are normally downward sloping. So if a good is bad, I think they mean that the more you get the worse of you are, hence it is upward sloping as you say.
My problem with this though is that in order to draw ICs you use certain assumptions about consumers - one of which is 'more can't make you worse off'. So in a very technical sense, you aren't drawing ICs if you draw an upward sloping line.