lying nestled together on the diagram—even though only three of the indifference curves, representing three

levels of utility, appear on Figure B1. In other words, an infinite number of indifference curves are not drawn

on this diagram—but you should remember that they exist.

Higher indifference curves represent a greater level of utility than lower ones. In Figure B1, indifference curve

Ul can be thought of as a “low” level of utility, while Um is a “medium” level of utility and Uh is a “high” level of

utility. All of the choices on indifference curve Uh are preferred to all of the choices on indifference curve Um,

which in turn are preferred to all of the choices on Ul.

To understand why higher indifference curves are preferred to lower ones, compare point B on indifference

curve Um to point F on indifference curve Uh. Point F has greater consumption of both books (five to three)
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