If two bundles are on the same indifference curve,then
A)the consumer derives the same level of utility from each.
B)the consumer derives the same level of ordinal utility from each but not the same level of cardinal utility.
C)no comparison can be made between the two bundles since utility cannot really be measured.
D)the MRS between the two bundles equals one.

Question

Quizplus · Accepted Answer

If two bundles are on the same indifference curve, it means that the consumer is indifferent between them and derives the same level of utility from each. Therefore, option A is the correct answer. Option B is incorrect because ordinal utility cannot be measured, and cardinal utility is not relevant to the comparison of two bundles on the same indifference curve. Option C is incorrect because while utility cannot be measured, we can still compare the relative utility of different bundles. Option D is incorrect because the MRS (marginal rate of substitution) between two bundles on an indifference curve can be any value, not necessarily equal to one.

If Two Bundles Are on the Same Indifference Curve,then