Indifference theory is based on the assumption that
A)consumers can always say which of two consumption bundles they prefer without having to say by how much they prefer it.
B)the consumer is able to quantify the difference in total utility received from two different consumption bundles.
C)the consumer has equated the marginal utilities of all products,and is therefore indifferent between consumption bundles.
D)the consumer receives the same utility and is therefore indifferent between any two consumption bundles.
E)consumers are not able to rank consumption bundles in order of preference.

Question

Quizplus · Accepted Answer

Indifference theory assumes that consumers are able to rank consumption bundles in order of preference, but do not necessarily have to quantify the difference in utility between them. Therefore, choice A is the best answer.

Indifference Theory Is Based on the Assumption That