Question

What is the difference between slope of indifference curve and slope of budget line?

Solution

Hint. Slope of IC shows the rate at which consumer is willing to substitute one good for the other good whereas slope of budget line shows ratio between P_x and P_y (i.e., P_x/P_y).

Some More Questions From Theory Of Consumer Behaviour Chapter

Give meaning of demand.

Name two determinants of demand.

List the factors that cause changes in demand.

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Theory Of Consumer Behaviour

What is the difference between slope of indifference curve and slope of budget line?

Some More Questions From Theory Of Consumer Behaviour Chapter

Give meaning of demand.

Name two determinants of demand.

List the factors that cause changes in demand.

What is law of demand?

What is demand schedule?

Why does demand curve slope downwards?

Differentiate between substitute and complementary goods.

What is meant by one good being substitute of other?

What is meant by one good being complementary to another.

Give an example of a pair of commodities that are substitutes of each other.

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