2) Consider the following three market baskets. A B C Cheese 5 15 10 Crackers 8 6 7 I If indifference curves exhibit diminishing marginal rates of substitution and baskets A da

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Chapter21: The Theory Of Consumer Choice
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2) Consider the following three market baskets.
A
B
C
Cheese
5
15
10
Crackers
a) C if preferred to both A and B
b) A and B are both preferred C
c) C is on the same indifference curve as A and B
d) cannot tell based on information provided
8
6
7
I
If indifference curves exhibit diminishing marginal rates of substitution and baskets A
and B are on the same indifference curve, then
B
Transcribed Image Text:2) Consider the following three market baskets. A B C Cheese 5 15 10 Crackers a) C if preferred to both A and B b) A and B are both preferred C c) C is on the same indifference curve as A and B d) cannot tell based on information provided 8 6 7 I If indifference curves exhibit diminishing marginal rates of substitution and baskets A and B are on the same indifference curve, then B
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