Refer to the Diagram, in Which the Downsloping Lines Are

question 168

Multiple Choice

Refer to the diagram, in which the downsloping lines are budget lines and I₁, I₂, and I₃ comprise an indifference map. The combinations of products M and N indicated by points 1, 2, and 5 are such that

• A)point 2 yields more utility than either 1 or 5.
• B)points 1 and 5 yield more utility than point 2.
• C)points 1, 2, and 5 yield equal amounts of utility.
• D)the levels of utility associated with these three points cannot be compared.