As long as a consumer is on the same indifference curve:
A)her preferences will not affect the marginal rate of substitution
B)she is unable to decide which bundle of goods to choose
C)she is indifferent among the points on that indifference curve
D)she is indifferent to all points which lie on any other indifference curves

Question

Quizplus · Accepted Answer

Being on the same indifference curve means that the consumer is equally satisfied with all the points on that curve. Therefore, she is indifferent among all those points and it doesn't matter which point she chooses as long as she remains on the same indifference curve. This is the essence of consumer choice theory that consumers choose the bundle of goods that gives them the highest level of satisfaction or utility. Preferences do affect the marginal rate of substitution, but since the consumer is already on the same indifference curve, her preferences are already reflected in the relative quantities of the goods she is consuming. The statement in option B is also incorrect as the consumer is able to choose from any point on the same indifference curve. Similarly, the statement in option D is incorrect as the consumer may have different levels of satisfaction or utility from the points on different indifference curves.

As Long as a Consumer Is on the Same Indifference