Nancy Lerner is taking a course from Professor Goodheart who will count only her best midterm grade and from Professor Stern who will count only her worst midterm grade.In one of her classes, Nancy has scores of 20 on her first midterm and 70 on her second midterm.When the first midterm score is measured on the horizontal axis and her second midterm score on the vertical, her indifference curve has a slope of zero at the point (20, 70) .This class could

A) be Professor Stern's but could not be Professor Goodheart's.
B) be Professor Goodheart's but could not be Professor Stern's.
C) not be either Professor Goodheart's or Professor Stern's.
D) be either Professor Goodheart's or Professor Stern's.
E) There is not enough information to tell whose class it could or couldn't be.

Question

Sarah Pastura · Accepted Answer

Final Answer : B, Explanation :  Since the indifference curve has a slope of zero at the point (20, 70), it indicates that Nancy's utility does not change with an increase in her second midterm score from 70, which would only be the case if her best score is what matters (as in Professor Goodheart's class). In Professor Stern's class, where the worst score counts, her utility would increase with an increase in her lower score.

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