In a preference map,consumption combinations on higher indifference curves
A) always cost more than any combination on a lower indifference curve.
B) always are preferred to combinations on lower indifference curves.
C) always cost less than any combination on a lower indifference curve.
D) always are less preferred than combinations on lower indifference curves.
E) are sometimes more preferred, sometimes less preferred, and sometimes equally preferred to any combination on a lower indifference curve.

Question

Quizplus · Accepted Answer

The principle of consumer preference implies that a consumption combination on a higher indifference curve represents a preferred combination to any combination on a lower indifference curve. Therefore, option B is the correct choice. Option A and C are incorrect because the cost of a combination is not necessarily dependent on the indifference curve. Option D is incorrect because, by definition of the indifference curve, any point on a given indifference curve is equally preferred to all other points on the same curve, so it is not possible to say that a combination on a higher indifference curve is less preferred. Option E is also incorrect because the fact that a combination is on a higher indifference curve does not automatically make it more, less or equally preferred compared to any combination on a lower indifference curve.

In a Preference Map,consumption Combinations on Higher Indifference Curves