| Subject: quize |
| Respected sir, Please sir reply with some reason I think about it but cant understanding Suppose there are only two goods A and B, if more of good A is always |
| Instructor's Reply: |
| If consumer always prefers more of good A, then good A is normal good. Good B is inferior good because less of good B is always preferred. In this case indifference curve slopes upward because when consumer increases consumption of good A, his utility increases. To keep the utility level constant on the indifference curve, this increase in utility is compensated by disutility that consumer derives by increasing consumption of good B. |
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