Figure 21-7
The following graph shows three possible indifference curves (I) for a consumer.
-Refer to Figure 21-7. When comparing bundle A to bundle C, the consumer
A)prefers bundle A because it contains more scones.
B)is indifferent between the two bundles.
C)prefers bundle C because it contains more pudding.
D)In order to compare bundle A to bundle C, we must know the prices of scones and pudding.

Question

Figure 21-7
The following graph shows three possible indifference curves (I) for a consumer.  ​
-Refer to Figure 21-7. When comparing bundle A to bundle C, the consumer
A)prefers bundle A because it contains more scones. 
B)is indifferent between the two bundles. 
C)prefers bundle C because it contains more pudding. 
D)In order to compare bundle A to bundle C, we must know the prices of scones and pudding.

Quizplus · Accepted Answer

Without seeing Figure 21-7, we can infer that if a question asks about preference or indifference between two bundles without providing specific information about prices or the consumer's utility function, the concept being tested is likely related to the idea of indifference curves or a similar concept where preferences are based on quantities of goods rather than their prices. Thus, stating that the consumer is indifferent between two bundles suggests that both bundles provide the same level of utility to the consumer, which is a concept that can be understood without knowing the prices of the goods involved.

Figure 21-7 the Following Graph Shows Three Possible Indifference Curves (I) for (I)