Question

For the consumer, a point on an indifference curve that lies farther from the origin is preferable compared to those points that are closer to the origin. True or False?

1) True
2) False

Answer 1

Higher indifference curves are preferable to lower ones for consumers as they indicate higher levels of utility. This preference is based on the greater consumption represented by the higher curves.

Step-by-step explanation:

Higher indifference curves are indeed preferable to lower ones for consumers. Indifference curves represent different levels of utility, with higher curves indicating higher levels of utility. Since all points on a given indifference curve have the same level of utility, a point on a higher indifference curve must have a higher level of utility compared to a point on a lower curve. This preference is due to the fact that higher indifference curves reflect greater consumption of the goods represented on the axes.