The combinations of gasoline and coffee along one of Sam's indifference curves are combinations
A) which require the same total expenditure.
B) that he can afford with his $60.00 income.
C) among which he is "indifferent."
D) that give him the same marginal rate of substitution.

Question

Quizplus · Accepted Answer

Indifference curves represent combinations of two goods that provide the same level of utility or satisfaction to the consumer. Therefore, the combinations of gasoline and coffee along one of Sam's indifference curves are combinations among which he is "indifferent," meaning he does not have a preference for one combination over another. Option A is incorrect because while the combinations along an indifference curve have the same level of utility, they do not necessarily require the same total expenditure. Option B is incorrect because the fact that Sam can afford the combinations with his $60.00 income does not determine which combinations he prefers. Option D is incorrect because while the marginal rate of substitution is a measure of the rate at which a consumer is willing to substitute one good for another while keeping the utility constant, it is not the same for all combinations along an indifference curve.

The Combinations of Gasoline and Coffee Along One of Sam's