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.
Correct Answer:
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