Explanation

Indifference curves slope downward and are convex to the origin because of the diminishing marginal rate of substitution. A higher indifference curve lies farther from the origin and represents a higher level of satisfaction, since it contains larger bundles of goods. Two indifference curves can never intersect, because an intersection would imply two different satisfaction levels at the same point. Statements 1 and 2 are therefore correct and statement 3 is wrong. Hence option B is correct.