Consider the following statements about indifference curves: 1. Indifference curves are convex to the origin. 2. Higher indifference curve represents higher level of satisfaction. 3. Two indifference curves cut each other. Which of the statements given above is/are correct?

Indifference curves (ICs) possess several fundamental properties in consumer theory. Statement 1 is correct because ICs are typically convex to the origin due to the law of diminishing marginal rate of substitution (MRS), which implies that as a consumer consumes more of one good, they are willing to give up less of another to maintain the same utility level [2]. Statement 2 is correct as an indifference map shows that bundles on higher indifference curves are preferred to those on lower ones, representing a higher level of satisfaction [3]. Statement 3 is incorrect because indifference curves cannot intersect. If they did, it would violate the principle of transitivity and monotonicity; a single bundle at the intersection would represent two different utility levels, which is logically inconsistent [1]. Therefore, only statements 1 and 2 are correct.

Sources

1. [2] Microeconomics (NCERT class XII 2025 ed.) > Chapter 2: Theory of Consumer Behaviour > Shape of an Indifference Curve > p. 12
2. [3] Microeconomics (NCERT class XII 2025 ed.) > Chapter 2: Theory of Consumer Behaviour > 1. Indifference curve slopes downwards from left to right: > p. 13
3. [1] Microeconomics (NCERT class XII 2025 ed.) > Chapter 2: Theory of Consumer Behaviour > 3.Two indifference curves never intersect each other: > p. 14