Question

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. 

(d) Indifference curves are drawn under the ordinal approach to consumer equilibrium

Answer 1

Option (b) is incorrect. 

Two regular convex to origin indifference curves cannot intersect each other. One indifference curve represents only one level of satisfaction on all the points on it. For different levels of satisfaction, there have to be different indifference curves. In the given figure there are two indifference curves intersecting each other.

As per the figure 

On IC₁ A = C

On IC₂ D = E 

At the point of intersection B, the situation emerges A = C = B = D = E. This is not possible and against the basic definition of indifference curve.