A consumer is a rational individual who knows what is good and bad for him/her. So, he always tries to achieve the best to get maximum satisfaction. Thus, the consumer chooses the set of bundles as per his preference which is best for him. The consumer always prefers to move to a point on the highest possible indifference curve given on the budget set. The slope of the budget line is the rate at which the consumer is able to substitute one good for the other in the market.
All the points on an indifference curve represent:
Bundles which are considered indifferent by the consumer
The correct answer is Bundles which are considered indifferent by the consumer.
Each point on an **indifference curve** represents different **combinations of two goods** that give the consumer the **same level of satisfaction**.
- Consumers are **indifferent** between these combinations as they provide equal utility.
- **(a) The same price** is incorrect because indifference curves do not reflect price levels.
- **(c) Straight line** is incorrect because indifference curves are usually curved due to diminishing MRS.
- **(d) Bundles which are considered same** is misleading, as the consumer values the different bundles equally, but they are not identical.
Important Questions from Consumer’s Equilibrium
Match List-I with List-II:
List-I List-II (A) God's own country (I) Karnataka (B) Information Technology Industry (II) Punjab (C) Industrially advanced (III) Kerala (D) Agriculturally affluent (IV) Gujarat Choose the correct answer from the options given below:
According to Keynesian theory, the equilibrium level of income is achieved when:
Two commodities are perfect substitutes for the consumer and the indifference curve will be:
Suppose a consumer can afford to buy 8 units of good X and 10 units of good Y. She spends her entire income. The prices of two goods are ₹7 and ₹9 respectively. The consumer’s income is ₹______.
The indifference curve is:
