Consider the following statements about indifference curves :
- 1. Indifference curves are convex to the origin.
- 2. Higher indifference curve represents higher level of satisfaction.
- 3. Two indifference curves cut each other.
Which of the statements given above is/are correct?
[amp_mcq option1=”1 only” option2=”1 and 2 only” option3=”2 and 3 only” option4=”3 only” correct=”option2″]
This question was previously asked in
UPSC CDS-1 – 2019
Statements 1 and 2 are correct. Statement 3 is incorrect. Therefore, option B is the correct answer.
Indifference curves are graphical representations of consumer preferences, showing combinations of two goods that yield the same level of satisfaction or utility. Key properties include: they are convex to the origin (due to diminishing marginal rate of substitution), higher curves represent higher satisfaction levels, and they do not intersect each other.