The use of indifference curves helps us determine the point:
A) Along the terms-of-trade line a country will choose
B) Where a country maximizes its resource productivity
C) At which a country ceases to become competitive
D) Where the marginal rate of transformation approaches zero

Question

Quizplus · Accepted Answer

Indifference curves are used in economics to show different combinations of two goods that provide equal satisfaction and utility to a consumer. In the context of international trade, they help determine the point along the terms-of-trade line where a country will choose to consume, balancing between imports and exports to maximize utility.

The Use of Indifference Curves Helps Us Determine the Point