How many of the following are true of all the bundles lying on one indifference curve of a consumer? (Her preferences are monotonic.)
(A) They give the consumer the same level of satisfaction.
(B) They cost the consumer the same amount of money.
(C) The consumer is indifferent among them.
(D) A bundle with more bananas has fewer mangoes.
(E) They all lie on the consumer’s budget line.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Three
An indifference curve is about satisfaction, not cost. All its bundles are equally good for the consumer.
(A) They give the consumer the same level of satisfaction. — Correct. Every point on the curve gives the same satisfaction.
(B) They cost the consumer the same amount of money. — Incorrect. Bundles of equal cost lie on a budget line; equal satisfaction does not mean equal cost.
(C) The consumer is indifferent among them. — Correct. That is why it is called an indifference curve.
(D) A bundle with more bananas has fewer mangoes. — Correct. The curve slopes downward: more bananas must be balanced by fewer mangoes.
(E) They all lie on the consumer’s budget line. — Incorrect. The budget line is drawn from prices and income; an indifference curve is drawn from her likes, so its bundles need not cost her whole income.
So three statements are true: (A), (C) and (D).
NCERT (2026-27): “2.1.2 Ordinal Utility Analysis … The consumer is said to be indifferent on the different bundles because each point of the bundles give the consumer equal utility. Such a curve joining all points representing bundles among which the consumer is indifferent is called an indifference curve. All the points such as A, B, C and D lying on an indifference curve provide the consumer with the same level of satisfaction. It is clear that when a consumer gets one more banana, he has to forego some mangoes, so that her total utility level remains the same and she remains on the same indifference curve. Therefore, indifference curve slopes downward. …” |