Final answer:
Moving along an indifference curve results in no change in satisfaction for the consumer since all points on the curve represent the same level of utility. This concept reflects the tradeoffs that consumers are willing to make between different goods while maintaining the same level of satisfaction.
Step-by-step explanation:
When a consumer moves upward or downward along a given indifference curve, their level of satisfaction remains the same. This is because each point along an indifference curve represents a combination of goods that provide the consumer with the same level of utility. The downward slope of the curve indicates that if a consumer chooses more of one good, they must take less of the other to maintain the same level of satisfaction, demonstrating the concept of the marginal rate of substitution.
In the case of Lilly and her tradeoffs between eating doughnuts and reading paperback books, any movement along an indifference curve such as Um means that she is altering the balance of doughnuts and books while keeping her overall utility unchanged. This illustrates the tradeoff and the rate at which she is willing to substitute one good for another without altering the utility she derives from her consumption bundle.