CAIE A-Level Economics 7.2.4 Limits of the Indifference Curve Model

CAIE A-Level Economics 7.2.4 Limits of the Indifference Curve Model
Cambridge International AS & A Level Economics 9708 syllabus for exams in 2026, 2027 and 20282026–2028

Practise evaluating indifference-curve assumptions about complete and stable preferences, perfect information, rational maximisation and choice without uncertainty under a fixed…

How this is tested

  • assess whether consumers can rank every bundle consistently with complete and transitive preferences
  • question perfect information, stable tastes and rational maximisation when choices involve uncertainty
  • retain limited income as a realistic constraint while testing behavioural assumptions separately

Question 2

[Maximum number: 1]

Which feature of indifference curve theory is most likely to apply in reality?

A

The consumer can express preferences between all possible combinations of goods.

B

The consumer has a limited income to spend.

C

The consumer will always behave rationally.

D

The consumer will always get positive utility from having more of the goods.