Question

Level of satisfaction on a normal indifference curve can remain the same only when __________.

• A. marginal rate of substitution is decreasing
• B. both commodities yield higher satisfaction as we move from left to right along the indifference curve
• C. consumer spends increasing amount of money on both the commodities
• D. consumer has complete information in the market

Answer 1

Answer: (A)

marginal rate of substitution is decreasing

A normal indifference curve (IC) has the same level satisfaction at all points on the IC because MRS is decreasing.