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Microeconomics- slope of indifference curve

 
 
Reply Mon 30 Oct, 2017 05:23 am
A consumer is eating 6 apples and 4 oranges per week. She would be indifferent between
this bundle and a bundle with 4 apples and 5 oranges. The indifference curve is drawn with
the number of apples on the horizontal axis, and the number of oranges on the vertical axis.
Starting from the bundle (6 apples, 4 oranges), what (approximately) is the slope of the
indifference curve?
(a) - 2
(b) - 1
(c) - 0.5
(d) None of the above




I know the right answer is c, but I don't get why it'a not a.
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View best answer, chosen by mary1998
OverTheReminds
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Reply Mon 30 Oct, 2017 07:15 am
@mary1998,
The answer is quite easy: the MRS between two points is equal to the slope of the secant line passing for those two points.

The slope of the secant line can be found as:
Δy/Δx = Y2-Y1/X2-X1

Here we have:

Y1 = 4 (ORANGES) X1 = 6 (APPLES)
Y2 = 5 (ORANGES) X2 = 4 (APPLES)

* O = Oranges
* A = Apples

(O2-O1)/(A2-A1)=

= (5-4)/ (4-6)
= 1/-2
= -0.5

You used to get 2 as result because you did (X2-X1)/(Y2-Y1), you basically calculated the multiplicative inverse of the slope of the secant line passing for the points.
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