Question

Consider the indifference curve illustrated in Figure F-1. Explain, in economic terms, why the curve is convex to the origin.

Short answer

The curve is convex to the origin due to decreasing marginal utility.

Step-by-step solution

Given Information

Indifference curves show the blend of merchandise that provide the clients with a similar degree of fulfilment. Any blend of a given detachment bend gives the client a similar degree of utility.

Explanation

The law of lessening marginal utility expresses that as we consume an ever-increasing number of units of a decent, the marginal utility got from the progressive units begins declining. As, as we move from point A to B, we excuse $3$ versatile power banks each year to get 1 unit of pointer pens each year. While, at point C we have adequate measure of Stylus pens, however less measure of convenient power banks. In this way, a development from C to D requires fewer units of compact power banks to be renounced for getting$1$ unit of the pointer pen. Subsequently, as we move from A to B to C to D, the rate at which Portable power banks are filled in for Stylus pens diminishes.