A student lists bundles (bananas, mangoes) on two indifference curves of a consumer with monotonic preferences.
| Indifference curve | Bundles on it |
|---|---|
| IC1 | A (2, 10) and B (4, 6) |
| IC2 | C (3, 11) and B (4, 6) |
Which of the following is correct about this list?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → It is not possible: the curves would meet at B, though C has more of both goods than A
The list cannot be right. B is on both curves, so A gives the same utility as B, and B the same as C. Then A and C would give equal utility.
But C (3, 11) has more of both goods than A (2, 10). Under monotonic preferences C must be preferred to A. Two indifference curves meeting at B lead to this conflicting result, so they cannot meet.
NCERT (2026-27): “3.Two indifference curves never intersect each other: Two indifference curves intersecting each other will lead to conflicting results. To explain this, let us allow two indifference curves to intersect each other as shown in the figure 2.8. As points A and B lie on the same indifference curve IC1, utilities derived from combination A and combination B will give the same level of satisfaction. Similarly, as points A and C lie on the same indifference curve IC2, utility derived from combination A and from combination C will give the same level of satisfaction.” “From this, it follows that utility from point B and from point C will also be the same. But this is clearly an absurd result, as on point B, the consumer gets a greater number of mangoes with the same quantity of bananas. So consumer is better off at point B than at point C. Thus, it is clear that intersecting indifference curves will lead to conflicting results. Thus, two indifference curves cannot intersect each other.” |