Asked by Shani Patel on Jun 11, 2024
Verified
As a consumer moves from one point to another along an indifference curve, which of the following is assumed to stay constant?
A) income or budget
B) prices of the two goods
C) total satisfaction from the two goods
D) marginal utility of the two goods
Indifference Curve
A graph representing different bundles of goods between which a consumer is indifferent, showing preferences in terms of trade-offs.
Constant Income
A situation where an individual's or entity's income remains unchanged over a period of time, despite changes in economic conditions or inflation.
Prices of Goods
The amount of money required to purchase specific products or commodities in the market.
- Comprehend the theory and visual depiction of indifference curves.
Verified Answer
SE
Sevket Emre CinarJun 15, 2024
Final Answer :
C
Explanation :
An indifference curve represents all combinations of goods that provide a consumer with the same level of satisfaction, implying that total satisfaction remains constant as the consumer moves along the curve.
Learning Objectives
- Comprehend the theory and visual depiction of indifference curves.