Figure 21-7
-Refer to Figure 21-7.Which of the following statements is correct?
A) Bundle A is preferred equally to bundle E.
B) Bundle A is preferred equally to bundle C.
C) Bundle B contains more cake than bundle C.
D) The bundles along indifference curve Indifference Curve 2 are preferred to those along indifference curve Indifference Curve 3.

Question

Figure 21-7 
-Refer to Figure 21-7.Which of the following statements is correct?
A) Bundle A is preferred equally to bundle E. 
B) Bundle A is preferred equally to bundle C. 
C) Bundle B contains more cake than bundle C. 
D) The bundles along indifference curve Indifference Curve 2 are preferred to those along indifference curve Indifference Curve 3.

Quizplus · Accepted Answer

Bundle A and Bundle C both cost $12, but Bundle A contains less cake than Bundle C. Therefore, the consumer would prefer Bundle B or Bundle C over Bundle A. Bundle E contains less cake and fewer ice cream cones than Bundle A, so Bundle E is not preferred to Bundle A. The bundles along indifference curve Indifference Curve 2 are all preferred to those along indifference curve Indifference Curve 3, indicating that the consumer values both cake and ice cream and prefers more of both goods. Therefore, the best choice for the consumer is Bundle B or Bundle C.

Figure 21-7 -Refer to Figure 21-7.Which of the Following Statements Is Correct