A person has utility given by =1^2 +2^2, where the marginal utilities for good 1 and 2 are given by 1 =21 and 2 =22. Which of the following statements is correct?

a. The indifference curves are all parallel and downward-sloping. b. The indifference curves are L-shaped, with kinks all lying on a straight line. c. The MRS increases (in absolute value) as we move to the right along an indifference curve. d. The MRS decreases (in absolute value) as we move to the right along an indifference curve Lyft has a surge pricing mechanism that increases the price of rids (and therefore the revenue of drivers per ride) when demand is high (compared to supply).

When surge pricing kicks in, which of the following statements is/are correct? a. The income effect induces drivers to drive longer. b. The substitution effect induces drivers to drive longer. c. The substitution and income effects go in opposite direction. d. If the substitution effect is larger in magnitude than the income effect, the driver enjoys more leisure.