Figure 3.4.1 -Refer to Figure 3.4.1 above. The consumer chooses A on budget line I₁ and B on budget line I₂. Which of the following statements is NOT true? A) A is preferred to B. B) B is preferred to C. C) C is preferred to D. D) A is preferred to C.

Question

Quizplus · Accepted Answer

The figure does not provide information about the consumer's preferences between B and C, so statement B may or may not be true. However, A is on a higher indifference curve than C, so D cannot be preferred to A. Therefore, statement D is true and A is preferred to C.

Figure 3.4.1 -Refer to Figure 3.4.1 Above. the Consumer Chooses a on a on Budget