Which of the following statements regarding preferences and indifference curves is true?
A) When choosing between two consumption bundles, a consumer will always prefer the consumption bundle on the lower indifference curve.
B) A consumer is indifferent between two consumption bundles that are on the same indifference curve.
C) When choosing between two consumption bundles, a consumer will always prefer the consumption bundle that is farthest to the right on an indifference curve.
D) When choosing between two consumption bundles, a consumer will always prefer the consumption bundle that is farthest to the left on an indifference curve.

Question

Quizplus · Accepted Answer

Indifference curves represent all the possible combinations of two goods that give a consumer the same level of satisfaction or utility. Therefore, a consumer is indifferent between any two consumption bundles that lie on the same indifference curve since they provide the same level of satisfaction. Option A is false because a consumer may prefer a consumption bundle on a lower indifference curve as it provides higher satisfaction. Options C and D are also false because the position of a bundle on an indifference curve does not necessarily indicate higher satisfaction.

Which of the Following Statements Regarding Preferences and Indifference Curves