The figure depicts indifference curves for consumption today and consumption later for Abraham and Sarah. These indifference curves are unusual as they are straight lines. Which of the following statements is correct?Select one correct answer  Group of answer choicesAbraham is more likely to want to smooth his consumption than Sarah.Abraham is more impatient than SarahSarah is more willing to give up more units of future consumption for the same amount of current consumption.Sarah’s indifference curve exhibits a higher degree of diminishing marginal returns to consumption than Abraham’s

Which of the following scenarios is consistent with a consumer's optimal choice?The budget line intersects the indifference curve at multiple pointsThe budget line is tangent to the indifference curveThe budget line intersects the indifference curve at one pointThe budget line is above the indifference curve

Indifference curves illustrateGroup of answer choicesa firm's profits.the prices of two goods.a consumer's preferences.a consumer's budget.

Suppose the tastes of an individual are represented by the following map of indifference curves:Which of the following statements is correct?Group of answer choicesThis individual receives no satisfaction from good AFor this individual goods A and B are perfect complementsFor this individual goods A and B are perfect substitutesThis individual receives no satisfaction from good B

Suppose there are only two goods in the economy: Yo-yos and Marbles. Bob only cares about his consumption of Yo-yos; the more Yo-yos he has the happier he is, regardless of his consumption of Marbles. In contrast, Lucy only cares about his consumption of Marbles; the more Marbles she has the happier she is, regardless of her consumption of Yo-yos. (a) Draw Bob’s indifference curves, putting Yo-yos in the x-axis and Marbles in the y-axis. (b) Draw Lucy’s indifference curves, putting Yo-yos in the x-axis and Marbles in the y-axis. (c) Do Bob’s and Lucy’s preferences comply with the property of diminishing marginal rate of substitution? (d) Are Bob’s and Lucy’s preferences transitive?

An indifference curve shows,Group of answer choicesexpenditure bundles that the consumer can afford given the prices.consumption bundles that give the consumer the same level of satisfactionconsumption bundles that give the consumer different level of satisfaction.expenditure bundles that the consumer is least willing to make.