18. Which two points in the following graph could not possibly be on the same in
ID: 1196422 • Letter: 1
Question
18. Which two points in the following graph could not possibly be on the same indifference curve if the basic properties of indifference curves hold?
a) Points A and B
b) Points B and C
c) Points C and D
d) Points D and E
19. Which of the following occurs when a consumer’s income increases?
a) The budget constraint shifts out
b) The budget constraint shifts in
c) The indifference curve shifts in
d) The indifference curve shifts out
20 Which of the following occurs when a consumer’s income increases?
a) The consumer can move to a higher indifference curve
b) The consumer must stay on the same indifference curve
c) The consumer can move to a lower indifference curve
d) It is not possible to say what the consumer will do
Explanation / Answer
18. Which two points in the following graph could not possibly be on the same indifference curve if the basic properties of indifference curves hold?
Points D and E
19. Which of the following occurs when a consumer’s income increases?
a) The budget constraint shifts out. As the income increases consumer will buy more of both the commodities he prefer and shows combinations in an indifference curve.
20. As the income increases the consumer can move on to higher indifference curve to gain higher satisfaction. The property if indifference curve is that the higher indifference curve will have higher utility.
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