Question

    Consider the following statements about indifference

    curves: 1. Indifference curves are convex to the origin. 2. Higher indifference curve represents higher level of satisfaction. 3. Two indifference curves cut each other. Which of the statements given above is/are correct?
    A 1 only Correct Answer Incorrect Answer
    B 1 and 2 Correct Answer Incorrect Answer
    C 2 and 3 Correct Answer Incorrect Answer
    D 3 only Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    An indifference curve is the locus of various points showing different combinations of two goods providing equal utility to the consumer. Four features of the Indifference Curve are given as below: · Indifference curves slope downward to the right. · Indifference curves are convex to the origin. · Indifference curves cannot intersect each other. · A higher indifference curve represents a higher level of satisfaction than a lower indifference curve.

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