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in Consumers Equilibrium by (63.7k points)

What do you meant by convexity of IC?

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IC is often convex to origin. It implies that its slope tends to decrease as we move along it from left to right. Since slope of IC is the same as MRS we can say that convexity of IC implies diminishing MRS.

(i) TU curve represents total utility. It slopes upwards upto point ‘G’. Point ‘G’ represents maximum total utility at the 5th unit. After point ‘G’, TU slopes downwards, meaning thereby, that at the 6th unit marginal utility becomes negative and total utility begins to fall.

(ii) MU curve represents marginal utility. It slopes downwards from left to right. It means that marginal utility of successive units goes on diminishing.

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