3. The Field of Indifference Curves
3.2. Check Answers
Correct! If point A is on the indifference curve then B cannot lie on the same curve. At point B Menna consumes more of both movies and video games than point A so it must lie on a higher indifference curve.
Incorrect. Point C would lie at the point along the indifference curve where the marginal rate of substitution is close to one.
Incorrect. Point D would lie at the point along the indifference curve where the marginal rate of substitution is high.
Correct! If two indifference curves intersect then this violates the principle of transitivity of preferences. If consumer utility is the same at some point on both indifference curves then they must be identical at all points on both curves.
Incorrect While the slopes of the indifference curves are different it is not implausible that consumers relative preferences may change somewhat at different utility levels.
Incorrect. The two curves displayed are a typical example of nested indifference curves.