Refer to the above diagram in which the downsloping linear lines are budget lines and I1, I 2, and I3 comprise an indifference map. The combinations of products M and N indicated by points 1, 2, and 5 are such that:
A) point 2 yields more utility than either 1 or 5.
B) points 1 and 5 yield more utility than point 2.
C) points 1, 2, and 5 yield equal amounts of utility.
D) the levels of utility associated with these three points cannot be compared.
Answer: C) points 1, 2, and 5 yield equal amounts of utility.
Economics
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