Consider the following statements about indifference curves 1 Indifference curves are convex to the ...........

Indian Economy (CDS) Introduction

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Consider the following statements about indifference curves:

1. Indifference curves are convex to the origin.

2. Higher indifference curve represents higher level of satisfaction.

3. Two indifference curves cut each other.

Which of the statements given above is/are correct?

1 only

1 and 2

2 and 3

3 only

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Explanation:

The indifference curves cannot intersect each other. Higher indifference curve represents a higher level of satisfaction because higher IC means a bundle consisting more of both the goods or same quantity of one good n more quantity of the other good . Hence statement 2 is correct and 3 is incorrect. Indifference curves is convex to the point of origin because of diminishing Marginal Rate of Substitution.