Consider the following three market baskets. If Basket A and Basket B are on the same indifference curve,preferences satisfy the usual assumptions,and the indifference curves have a diminishing marginal rate of substitution,
A) Basket C is preferred to Basket A
B) Basket A is preferred to Basket C
C) The consumer is indifferent between Basket A and Basket C
D) There is not enough information to determine how the consumer would rank Basket A relative to Basket C.

Question

Consider the following three market baskets.  If Basket A and Basket B are on the same indifference curve,preferences satisfy the usual assumptions,and the indifference curves have a diminishing marginal rate of substitution,
A) Basket C is preferred to Basket A 
B) Basket A is preferred to Basket C 
C) The consumer is indifferent between Basket A and Basket C 
D) There is not enough information to determine how the consumer would rank Basket A relative to Basket C.

Quizplus · Accepted Answer

The Answer of Consider the following three market baskets.  If Basket A and Basket B are on the same indifference curve,preferences satisfy the usual assumptions,and the indifference curves have a diminishing marginal rate of substitution,
A) Basket C is preferred to Basket A 
B) Basket A is preferred to Basket C 
C) The consumer is indifferent between Basket A and Basket C 
D) There is not enough information to determine how the consumer would rank Basket A relative to Basket C.

Consider the Following Three Market Baskets