Which among the following are the features of the indifference curve? (A) Indifference curve slopes downwards from left to right. Choose the correct answer from the options given below: |
(A), (C) and (D) only (A), (B) and (C) only (A), (B), (C) and (D) (A), (B) and (D) only |
(A), (B) and (D) only |
The correct answer is Option (4) → (A), (B) and (D) only (A) Indifference curve slopes downwards from left to right — True, because to maintain the same level of satisfaction, a consumer must give up some quantity of one good to gain more of another. (B) Higher indifference curve gives greater level of utility — True, since a higher curve represents a combination of goods that yields more satisfaction. (C) Indifference curve reflects negative utility — False, because indifference curves show equal and positive levels of satisfaction, not negative utility.An indifference curve is based on the assumption that the consumer has monotonic preferences, which means they prefer more of a good to less. Therefore, the goods considered generally have positive marginal utility (or at least non-negative). While it is possible to graph goods with negative utility (bads) using indifference curves, this is an exception, and the core concept is built around positive utility/satisfaction. The curve itself represents an equal level of utility, which is positive. (D) Two indifference curves never intersect each other — True. Each indifference curve represents a distinct level of utility. If two curves intersected, it would imply that the point of intersection provides two different levels of satisfaction simultaneously, which violates the assumption of consistency (transitivity) in consumer preferences. |