Budget Curves

A consumer cannot be indifferent about two combinations that yield disparate levels of utility. Therefore, an indifference curve cannot be

  140.   Each point along an indifference curve indicates a combination at which a consumer does not have a preference. Two divergent indifference curves can produce at least two points where there are distinct preferences. Therefore, indifference curves CANNOT

  141.   Perfect substitutes produce an indifference curve with a(n) ________ marginal rate of substitution.

  142.   ________ exist(s) when a consumer is completely indifferent between two goods.

  143.   ________ exist(s) when a consumer is interested in consuming two goods in fixed proportions.

  144.   A typical indifference curve that reflects the trade-off between two goods that are not ________ or ________ has a marginal rate of substitution that falls between these two extremes.

  145.   The slope of the indifference curve for perfect substitutes

  146.   The maximization point is the location at which an indifference curve and the budget constraint line

  147.   A change in price results in a(n) ________ of the budget constraint line.

              Graphing only a change in price for a good does not distinguish the contribution of the ________ from the ________.

  149.   For a low-priced good, the ________ is generally negligible and the substitution effect tends to ________.

  150.   A new ________ that is parallel to the first one, but just tangent to the new indifference curve, will reveal the real-income effect.

139.