Basket of goods A is on an indifference curve that lies closer to the origin than basket B. From this we know that
A) the prices of the goods in A are less than the prices of the goods in B.
B) the satisfaction from consuming A is more than the satisfaction from consuming B.
C) the marginal utility from consuming A is less than the marginal utility from consuming B.
D) the satisfaction from consuming A is less than the satisfaction from consuming B.

Question

Quizplus · Accepted Answer

Indifference curves represent combinations of goods that give a consumer the same level of satisfaction. If basket A is on an indifference curve closer to the origin than basket B, it means that B provides a higher level of satisfaction than A, since indifference curves further from the origin represent higher levels of satisfaction.

Basket of Goods a Is on an Indifference Curve That