When quantities of two goods belong to the same indifference curve, which of the following is true ?
A) The combinations of the two goods along the indifference curve yield the same total utility.
B) Prices of the two goods are equal.
C) Marginal utilities of both goods are equal.
D) The total utility of all combinations above the curve equal zero.

Question

Quizplus · Accepted Answer

When quantities of two goods belong to the same indifference curve, it means that the consumer is indifferent between them, which implies that they yield the same level of utility. Therefore, choice A is correct. Prices of the two goods may or may not be equal, and marginal utilities may or may not be equal, so choices B and C are incorrect. Choice D is also incorrect because the total utility of all combinations above the curve cannot be zero as some combinations may still provide positive utility even if they lie above the indifference curve.

When Quantities of Two Goods Belong to the Same Indifference