Reference: Ref 4-3 (Figure 4.3) Which of the following statements is FALSE? Bund

Question

Reference: Ref 4-3

(Figure 4.3) Which of the following statements is FALSE?

Bundle A is preferred to bundle C.

Indifference curve U2 provides a higher level of utility than indifference curve U1.

Bundle C is preferred to bundle D.

The consumer is indifferent between bundle A and bundle D.

Bundle A is preferred to bundle C.

Indifference curve U2 provides a higher level of utility than indifference curve U1.

Bundle C is preferred to bundle D.

The consumer is indifferent between bundle A and bundle D.

Explanation / Answer

Bundle A is preferred to bundle C.

Because, Indifference curve U2 provides a higher level of utility than indifference curveU1. Also you are getting optimum values of tomatoes and carrot at point C

Bundle A is preferred to bundle C.

Because, Indifference curve U2 provides a higher level of utility than indifference curveU1. Also you are getting optimum values of tomatoes and carrot at point C

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