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Question
In the following Question, read the following statement and choose the correct alternative among those given below:
Statement 1: An indifference curve is concave to the origin because of increasing MRS.
Statement 2: Every point on indifference curve represents an equal amount of satisfaction to the consumer.
Options
Both the Statements are true.
Both the Statements are false.
Statement 1 is true and Statement 2 is false.
Statement 2 is true and Statement 1 is false.
MCQ
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Solution
Statement 2 is true and Statement 1 is false.
Explanation:
An indifference curve is normally convex to the origin because MRS diminishes, so Statement 1 is false. All points on the same indifference curve represent combinations giving equal satisfaction, so Statement 2 is true.
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