-The indifference curves in the figure above (I1, I2 and I3) reflect Peter's consumption preferences. Which of the following combinations of goods does Peter prefer the most?
A) 48 slices of pizza and 12 chocolate bars
B) 32 slices of pizza and 8 chocolate bars
C) 24 slices of pizza and 24 chocolate bars
D) 40 slices of pizza and 20 chocolate bars

Question

-The indifference curves in the figure above (I1, I2 and I3) reflect Peter's consumption preferences. Which of the following combinations of goods does Peter prefer the most?
A) 48 slices of pizza and 12 chocolate bars 
B) 32 slices of pizza and 8 chocolate bars 
C) 24 slices of pizza and 24 chocolate bars 
D) 40 slices of pizza and 20 chocolate bars

Quizplus · Accepted Answer

Indifference curves represent combinations of goods that provide a consumer with the same level of satisfaction. The further from the origin an indifference curve is, the higher the level of satisfaction it represents. Therefore, the combination of goods on the highest indifference curve is preferred. In this scenario, without seeing the figure, the correct answer is inferred based on the principle that option D is preferred if it lies on the highest indifference curve mentioned.

-The Indifference Curves in the Figure Above (I1, I2 and I3)