... them since they yield the same level of satisfaction. This theory is based on the fact that consumers do not measure the utility of each good but compare the goods and make combinations based on the price and the utility of them. Draw a diagram of Indifference curve Indifference curves assume the consumer is able to "rank their preferences". Any movement of the indifference curve to the right represents an increase in utility; therefore consumers prefer indifference curves further from the origin. E.g. I4 is preferred to I3, which the consumer prefers to I2, etc. Every point on the curve gives the same utility. Point C offers a lot of meals and few films, and point A offers many films but few meals as more films would give the consumer more utility and therefore the amount of meals must decrease to keep the utility constant. Due to the fact that the consumer will prefer ...

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