Question

From the above diagram, identify the point which is inferior for a consumer with respect to the indifference curve and budget line.

• A. Point A
• B. Point D
• C. Point B
• D. Point C

Hint:

Inferior means affordable but on a lower indifference curve than the best affordable point.

Answer 1

The Correct Option is B

Step 1: Understanding the Diagram:
The diagram shows a budget line and three indifference curves for mangoes and bananas. Point A is where the budget line touches an indifference curve. Points B and C lie on higher curves above the budget line. Point D lies on the budget line but on a lower curve.

Step 2: Key Rule:
A consumer reaches the best choice where the budget line is tangent to the highest reachable indifference curve. A point is inferior if the consumer can afford it, but another affordable point gives a higher level of satisfaction.

Step 3: Check Point A:
A is the tangency point. It is on the budget line, so it is affordable, and it lies on the highest curve the consumer can reach. So A is the optimal point, not inferior.

Step 4: Check Point D:
D lies on the budget line, so the consumer can afford it. But D is on a lower indifference curve than A. By moving along the budget line from D to A, the consumer gets more satisfaction at the same cost. So D is inferior.

Step 5: Check Points B and C:
B and C lie on indifference curves that are above the budget line. They give more satisfaction, but the consumer cannot afford them with the given income. They are unattainable, not inferior.

Final Answer:
Point D is affordable but gives less satisfaction than point A, so it is the inferior point. This is option (2). \[ \boxed{2} \]