If there are only two goods, if more of good 1 is always preferred to less, and if less of good 2 is always preferred to more, then indifference curves
a. slope downward.
b. slope upward.
c. may cross.
d. could take the form of ellipses. e. None of the above.
Explain with an example of the graphic

In this case, we are dealing with two goods where:
- Good 1 is preferred **more** (i.e., individuals always prefer more of Good 1).
- Good 2 is preferred **less** (i.e., individuals always prefer less of Good 2).

This implies that **increased consumption of Good 1** increases utility, while **increased consumption of Good 2** decreases utility.

### **Analysis of Indifference Curves:**
1. **Indifference curves** represent combinations of the two goods that provide the same level of utility or satisfaction.
2. Given that more of Good 1 is preferred, moving **rightward** (increasing Good 1) along the graph increases utility.
3. Since less of Good 2 is preferred, moving **downward** (decreasing Good 2) along the graph increases utility.

To remain on the same indifference curve, if we consume more of Good 1, we need to **consume more of Good 2** to maintain utility (because Good 2 decreases utility). This means that the indifference curve will have a **positive slope**, as increasing Good 1 must be offset by increasing Good 2 to remain at the same utility level.

### Conclusion:
- The correct answer is **(b) indifference curves slope upward**.

### Example of a Graphic:
Imagine a graph where the x-axis represents Good 1 (more is better) and the y-axis represents Good 2 (less is better). The indifference curves will be upward sloping, as more of Good 1 requires more of Good 2 to keep the utility constant.

Would you like me to generate a visual representation of this example?

### 5 Follow-Up Questions:
1. How do the shapes of indifference curves change when both goods are preferred more?
2. What happens to the indifference curves when both goods are considered "bads"?
3. How does the concept of marginal utility apply to this scenario?
4. Can indifference curves ever be vertical or horizontal? Why or why not?
5. What real-world examples could match the preferences in this case?

### Tip:
Indifference curves never cross because doing so would violate the assumption of transitivity in consumer preferences.

If there are only two goods, if more of good 1 is always preferred to less, and if less of good 2 is always preferred to more, then indifference curves: a. slope downward. b. slope upward. c. may cross. d. could take the form of ellipses. e. None of the above.

Explore indifference curves in microeconomics where more of good 1 is preferred, and less of good 2 is preferred. Understand how these curves slope upward due to the interplay of utility maximization and consumer preferences. Key concepts include transitivity and utility theory.

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