Match the following. List-I List-II a. Convexity of the indifference curve to origin 1. Indifference curve analysis b. Quantity of certain goods sacrificed for a large quantity of other goods 2. Consumer’s equilibrium c. Equality of the ratio of the marginal utilities with that of the prices of the two goods 3. Substitutability/Complementarity of the two goods d. Separation of substitution and income effects from the total price effect 4. Marginal rate of substitution

The correct answer is:

• a-3, b-1, c-4, d-2

Here is a brief explanation of each option:

• a. Convexity of the indifference curve to origin

The convexity of the indifference curve to origin means that the consumer is willing to give up less of one good to obtain more of another good, the more of the first good he already has. This is because the marginal utility of a good declines as the consumer consumes more of it.

• b. Quantity of certain goods sacrificed for a large quantity of other goods

The quantity of certain goods sacrificed for a large quantity of other goods is called the marginal rate of substitution. It is the amount of one good that a consumer is willing to give up to obtain one more unit of another good.

• c. Equality of the ratio of the marginal utilities with that of the prices of the two goods

The equality of the ratio of the marginal utilities with that of the prices of the two goods is called

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