Figure 21-7
-Refer to Figure 21-7.When comparing bundle A to bundle E,the consumer
A) prefers bundle A because it contains more donuts.
B) prefers bundle E because it lies on a higher indifference curve.
C) prefers bundle E because it contains more donuts.
D) is indifferent between the two bundles.

Question

Figure 21-7 
-Refer to Figure 21-7.When comparing bundle A to bundle E,the consumer
A) prefers bundle A because it contains more donuts. 
B) prefers bundle E because it lies on a higher indifference curve. 
C) prefers bundle E because it contains more donuts. 
D) is indifferent between the two bundles.

Quizplus · Accepted Answer

The consumer prefers bundle E because it lies on a higher indifference curve, indicating that it provides a higher level of utility than bundle A. Even though bundle A contains more donuts, the consumer is willing to sacrifice some donuts for more cookies and still derive a higher level of satisfaction from bundle E.

Figure 21-7 -Refer to Figure 21-7.When Comparing Bundle a to Bundle E,the