Western Governors University (WGU) ECON5000 C211 Global Economics for Managers Practice Exam

When indifference curves do not cross, it signifies that preferences are consistent across all levels of consumption. Indifference curves represent combinations of two goods that provide the same level of satisfaction to a consumer. If these curves were to cross, it would imply that the same combination of goods provides two different levels of satisfaction, which contradicts the fundamental assumption of rational consumer behavior that preferences are consistent and transitive.

This consistency is crucial for understanding consumer choices and helps to illustrate how individuals make trade-offs between different goods, seeking to maximize their utility while remaining within their budget constraints. The non-crossing of indifference curves supports the idea that each unique curve corresponds to a different level of utility, ensuring that higher curves represent higher satisfaction levels without any ambiguity in consumer preferences.

Other options may touch on related concepts but do not accurately capture the significance of the non-crossing property in relation to consumer preferences.