Suppose Arun consumes only 2 goods - books and CDs - and has a set of downward sloping indifference curves.As Arun moves from one point to another on a particular indifference curve,
A)Arun is consuming the same combination of goods,but with varying levels of income.
B)the combination of books and CDs will vary,but the level of utility remains constant.
C)the combination of books and CDs that Arun prefers will remain constant,but the level of satisfaction will vary.
D)Arun's level of satisfaction will vary as the combinations of books and CDs varies.
E)the combination of books and CDs and Arun's income level will remain constant.

Question

Quizplus · Accepted Answer

An indifference curve shows all the combinations of two goods that give a consumer the same level of satisfaction. As Arun moves from one point to another on a particular indifference curve, the combination of books and CDs will vary, but the level of utility remains constant.

Suppose Arun Consumes Only 2 Goods - Books and CDs