The correct answer is Option (2) → (A), (C) and (E) only
Here's why each statement is true or false:
(A) Marginal Utility is the change in Total Utility due to consumption of one additional unit of commodity. - This is true. Marginal utility refers to the extra satisfaction gained from consuming one additional unit of a good or service.
(B) Two Indifference Curves intersect each other. - This is false. Indifference curves represent combinations of goods that provide the same level of satisfaction. If two curves intersected, it would mean a single combination could provide two different levels of satisfaction, which is illogical.
(C) Marginal Utility becomes Zero at a level when Total Utility remains constant. - This is true. As you consume more and more units of a good, the additional satisfaction you get from each extra unit (marginal utility) eventually tapers off and reaches zero. At this point, your total satisfaction (utility) is maximized for that good.
(D) Diminishing Marginal Rate of Substitution (MRS) does not affect Indifference Curve. - This is false. The Diminishing Marginal Rate of Substitution (MRS) is a key property of indifference curves. It affects the shape of the curve, making it convex to the origin. MRS refers to the rate at which you are willing to give up one good to consume more of another while maintaining the same level of satisfaction. A diminishing MRS reflects that you're willing to give up less and less of the first good as you consume more of the second good. This movement along an indifference curve reflects this trade-off.
(E) Indifference Curve slopes downwards from left to right. - This is true. Indifference curves typically slope downwards from left to right, reflecting the trade-off between two goods, where an increase in the quantity of one good necessitates a decrease in the quantity of the other to maintain the same level of utility. Because you can substitute one good for another while maintaining the same level of satisfaction, the indifference curve will slope downward. As you consume more of one good (moving to the right), you'll need to give up some of the other good (moving down) to stay on the curve.
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