Consider the Following Three Market Baskets

question 60

Multiple Choice

Consider the following three market baskets. If Basket A and Basket B are on the same indifference curve,preferences satisfy the usual assumptions,and the indifference curves have a diminishing marginal rate of substitution,

• A) Basket C is preferred to Basket A
• B) Basket A is preferred to Basket C
• C) The consumer is indifferent between Basket A and Basket C
• D) There is not enough information to determine how the consumer would rank Basket A relative to Basket C.