Question
Consider the following statements about indifference curves: 1. Indifference curves are convex to the origin. 2. Higher indifference curve represents higher level of satisfaction. 3. Two indifference curves cut each other. Which of the statements given above is/are correct?
Solution
An indifference curve is the locus of various points showing different combinations of two goods providing equal utility to the consumer. Four features of the Indifference Curve are given as below: · Indifference curves slope downward to the right. · Indifference curves are convex to the origin. · Indifference curves cannot intersect each other. · A higher indifference curve represents a higher level of satisfaction than a lower indifference curve.
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