The following figure shows the indifference curves (IC) and the budget constraint (BC) of a consumer who needs to decide between the number of trousers and shirts he should purchase.
-Refer to the figure above.Which indifference curve depicts the highest level of utility?
Definitions:
Willingness to Pay
The maximum amount an individual is prepared to spend to acquire a good or service or to avoid something undesirable.
Consumer Surplus
The gap between the amount consumers are prepared to spend on a good or service and the actual price they pay, signifying consumers' advantage.
Refrigerator
An appliance used to keep food and drinks cool and preserved by maintaining a temperature below the ambient level.
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