Answer to Question #71872 in Microeconomics for Tanishk goyal
Explain the exception shapes of IC?
If two goods X and Y are perfect substitutes, the indifference curve is a straight line with negative slope, because the MRSxy is constant. The value of this slope is throughout minus 1, and MRSXY=1. If the two goods are close substitutes, such as coarse rice and wheat, there is the high degree of substitutability of the two goods. The slope of the indifference curve is almost constant between the range, that is, MRSxy is almost identical at all points in this range. If the two goods are perfect complements the indifference curve is right-angled or L shaped). The vertical portion of the curve reveals that no amount of reduction in good Y will lead even to a slight increase in good X. Thus MRSxy is zero. In the case of highly or close complementary goods, the indifference curve has a sharp curvature near the bend. The consumer substitute X for Y at and near the bend of the curve.