Economics 9708 · AS & A Level · Indifference curves and budget lines

Indifference curves and budget lines — practice question

The diagram illustrates two indifference curves. What do indifference curves show?

  • AConsumers get more satisfaction on curve I₁ from consuming more of X and less of Y.
  • BConsumers get more satisfaction on curve I₂ from consuming less of X and more of Y.
  • CEach point on the curve represents the marginal rate of substitution of good X for good Y.
  • DMovement from I₁ to I₂ cannot be made unless the indifference curves cross.

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