Final answer:
The statement is false; the cardinal utility approach, which assigns numerical values to utility, and the indifference curve approach, which does not use numbers but instead ranks preferences, have different implications in representing consumer preferences and satisfaction.
Step-by-step explanation:
The statement that the cardinal utility approach has exactly the same implications as the indifference curve approach is false. These two approaches in economic theory interpret consumer choice differently. The cardinal utility approach quantifies utility with exact numerical values, while the indifference curve approach is based on ordinal utility, which does not require numeric measurements but instead ranks preferences in order of intensity.
Indifference curves illustrate combinations of two goods that provide the same level of satisfaction or utility to a consumer. They are always downward sloping and convex to the origin. This shape reflects the trade-off a consumer is willing to make between two goods, maintaining the same level of utility – a concept known as the marginal rate of substitution. As a consumer moves along the indifference curve, they trade off less of a good they have in abundance for more of a good they have less of.
Lastly, the indifference curves assumption that additional units of one good should compensate for the reduction of the other to maintain utility is based on the principle of diminishing marginal utility. This is inherently different from cardinal utility, which requires absolute values of satisfaction.