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Explain why an indifference curve is convex to the origin ?

Answer» <html><body><p></p>Solution :The indifference curves are convex to the origin because of the diminishing marginal rate of <a href="https://interviewquestions.tuteehub.com/tag/substitution-1231654" style="font-weight:bold;" target="_blank" title="Click to know more about SUBSTITUTION">SUBSTITUTION</a>. The MRS diminishes because of the decline in the marginal utility, which means with more and more <a href="https://interviewquestions.tuteehub.com/tag/consumption-931383" style="font-weight:bold;" target="_blank" title="Click to know more about CONSUMPTION">CONSUMPTION</a> of one commodity, the customer’s utility starts declining and he is not willing to consume it more at the cost of the other commodity.For <a href="https://interviewquestions.tuteehub.com/tag/example-978283" style="font-weight:bold;" target="_blank" title="Click to know more about EXAMPLE">EXAMPLE</a>, let’s say there are two chocolates, dairy milk, and <a href="https://interviewquestions.tuteehub.com/tag/nestle-1113788" style="font-weight:bold;" target="_blank" title="Click to know more about NESTLE">NESTLE</a>, with more and more consumption of dairy milk chocolates the utility continues to decline, and the customer will no more give up the Nestle chocolates to <a href="https://interviewquestions.tuteehub.com/tag/buy-391430" style="font-weight:bold;" target="_blank" title="Click to know more about BUY">BUY</a> the dairy milk. Here, MRS shows the slope of the indifference curve.</body></html>


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