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Figure 4.8 Curvature of Indifference Curves
The curvature of indifference curves reflects information about the consumer’s preferences between two goods, just as its steepness does. (a) Goods that are highly substitutable (such as decaf lattes and decaf coffees) are likely to produce indifference curves that are relatively straight. This means that the MRS does not change much as the consumer moves from one point to another along the indifference curve. (b) Goods that are complementary will generally have indifference curves with more curvature. For example, if Evan has many tortilla chips and little guacamole, he will be willing to trade many tortilla chips to get some guacamole. If a consumer has a lot of guacamole and few tortilla chips, he will be less willing to trade chips for guacamole.