Question

Monroe consumes crab cakes and tuna. Monroe's utility increases with the consumption of crab cakes, but his utility neither increases nor decreases with the consumption of tuna. Assuming tuna is on the x-axis and crab cake is on the y-axis, what do Monroe's indifference curves look like? horizontal lines downward-sloping lines vertical lines upward-sloping lines from the origin

Answer 1

The correct answer is (a) horizontal lines

It is given that Monroe's utility increases with the consumption of crab cakes, but his utility neither increases nor decreases with the consumption of tuna. This means he considers that Tuna as a neutral good and hence His utility will remain same whatever be the Tuna( keeping amount of Crab Cakes fixed).

Indifference curve shows combination of Goods at which consumer attains same level of utility and as discussed above His utility will remain same whatever be the Tuna( keeping amount of Cakes fixed). We have to draw curve at which Amount of Crab Cakes is fixed and whatever be amount of Tuna and this will be our Indifference Curve.

It is given that tuna is on the x-axis and crab cake is on the y-axis, what do Monroe's indifference curves look like

Hence, Using above details of the IC we get that Indifference Curve will be a horizontal line( i.e. amount of Crab cakes are fixed and amount of Tunas are changing).

Hence Indifference Curve will like like the given figure.

Hence, the correct answer is (a) horizontal lines