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Economics miscellaneous

  1. An indifference curve measures ______________ level of satisfaction derived from different combinations of commodity X and Y.
    1. same
    2. higher
    3. lower
    4. minimum
Correct Option: A

An indifference curve may be defined as the locus of points, each representing a different combination of two substitute goods, which yield the same utility or level of satisfaction to the consumer. Therefore, he is indifferent between any two combinations of goods when it comes to making a choice between them. So if, for example, a consumer makes five combinations a, b, c, d and e of two substitute commodities, X and Y, all these combinations yield the same level of satisfaction indicated by U.



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