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JAMB Economics 1985 Question 13

Question 13

Theory of Consumer Behaviour

At every point on an indifference curve, the

  1. A.total utility is decreasing
  2. B.prices of all goods are constant
  3. C.consumer is satiated
  4. D.level of utility is constant
  5. E.level of utility is increasing.
Show the answer and explanation

Answer: D (level of utility is constant)

Explanation

An indifference curve joins combinations of two goods that give the consumer the same satisfaction, so utility is constant along it.