Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Theory of Consumer behaviour

Question:

Choose the correct combination of properties of indifference curve given below :

(A) Indifference curve slopes from right to left

(B) Two indifference curves cut each other

(C) Higher indifference shows higher utility

(D) Indifference curve is convex to origin

(E) Indifference curve is locus of combination of two goods along with a consumer is indiffernet

Choose the correct answer from the options given below :

Options:

(A), (B) and (C) Only

(A), (B) and (E) Only

(A), (C), (D) and (E) Only

(C), (D) and (E) Only

Correct Answer:

(C), (D) and (E) Only

Explanation:

The correct answer is option (4) : (C), (D) and (E) Only

Let's analyze each statement about the properties of indifference curves:

(A) Indifference curve slopes from right to left: This is incorrect. Indifference curves slope downwards from left to right, indicating that as you increase the quantity of one good, you must decrease the quantity of another good to maintain the same level of utility.

(B) Two indifference curves cut each other: This is incorrect. Indifference curves cannot intersect each other. If they did, it would violate the assumption that higher indifference curves represent higher levels of utility, which is inconsistent.

(C) Higher indifference shows higher utility: This is correct. An indifference curve that lies above and to the right of another indifference curve represents a higher level of utility.

(D) Indifference curve is convex to origin: This is correct. Indifference curves are typically convex to the origin due to the assumption of diminishing marginal rate of substitution, which means that as a consumer substitutes one good for another, the rate at which they are willing to make the substitution decreases.

(E) Indifference curve is locus of combination of two goods along with a consumer is indifferent: This is correct. An indifference curve represents all combinations of two goods that provide the consumer with the same level of satisfaction or utility.