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Identify which of the following is not true for the Indifference Curves. Give valid reasons for choice of your answer. (a) Lower indifference curve represents lower level of satisfaction (b) Two regular convex to origin indifference curves can intersect each other. (c) Indifference curve must be convex to origin at the point of tangency with the budget line at the consumer's equilibrium. ltbr. (d) Indifference curves are drawn under the ordinal approach to consumer equilibrium |
| Answer» <html><body><p></p>Solution :Out of the given options. (b) is incorrect. Indifference Curves have a property that two ICs cannot intersect. Suppose, there are any two ICs <a href="https://interviewquestions.tuteehub.com/tag/intersecting-2745467" style="font-weight:bold;" target="_blank" title="Click to know more about INTERSECTING">INTERSECTING</a> each other. As per the <a href="https://interviewquestions.tuteehub.com/tag/figure-987693" style="font-weight:bold;" target="_blank" title="Click to know more about FIGURE">FIGURE</a>: <br/> <img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/SG_MIC_ECO_C02_S01_039_S01.png" width="80%"/> <br/> `A = C ("on " IC_(<a href="https://interviewquestions.tuteehub.com/tag/1-256655" style="font-weight:bold;" target="_blank" title="Click to know more about 1">1</a>))` <br/> `D = E ("on " IC_(<a href="https://interviewquestions.tuteehub.com/tag/2-283658" style="font-weight:bold;" target="_blank" title="Click to know more about 2">2</a>))` <br/> But if we see the peculiarity of point B (the point of intersection), this would result into absurd situation of `A = C = B " & " D = C = B`, which is not possible, as they are violating the basic definition of the indifference curves.</body></html> | |