Identify the correct properties of indifference Curve (IC) :

(A) IC slopes downward because in order to increase the consumption of one good, we must increase the consumption of the other good

(B) IC is concave to the origin.

(C) IC is convex to the origin because of law of Diminishing Marginal Rate of Substitution

(D) IC  is convex to the origin because of law of Diminishing Marginal Utility

(E) IC slopes downward because in order to increase the consumption of one good, we must decrease the consumption of the other good

Choose the correct answer from the options given below :

(C) & (E) Only

The correct answer is option (3) : (C) & (E) Only

(A) IC slopes downward because in order to increase the consumption of one good, we must increase the consumption of the other good: This statement is incorrect.

(B) IC is concave to the origin: This statement is incorrect. Indifference curves are typically convex to the origin. This reflects the law of diminishing marginal rate of substitution, meaning the rate at which a consumer is willing to substitute one good for another decreases as they consume more of that good.

(C) IC is convex to the origin because of law of Diminishing Marginal Rate of Substitution: This statement is correct. The convex shape of indifference curves reflects the diminishing marginal rate of substitution. As the consumer consumes more of one good (say, good X), they are willing to give up less and less of the other good (say, good Y) to maintain the same level of satisfaction.

(D) IC is convex to the origin because of law of Diminishing Marginal Utility: This statement is incorrect. The convex shape of indifference curves is not due to diminishing marginal utility but rather due to the diminishing marginal rate of substitution. Marginal utility refers to the additional satisfaction gained from consuming one more unit of a good, while marginal rate of substitution refers to the rate at which a consumer is willing to trade one good for another.

(E) IC slopes downward because in order to increase the consumption of one good, we must decrease the consumption of the other good: This statement is correct. Indifference curves slope downward because, at any point along the curve, if you increase the consumption of one good (say, good X), to maintain the same level of satisfaction, you must decrease the consumption of the other good (say, good Y). This reflects the principle that consumers make trade-offs between goods to maximize their utility given their budget constraint.