Sam's budget is $60.00.The combinations of gasoline and coffee along one of Sam's indifference curves are combinations
A) that require the same total expenditure.
B) that he can afford with his $60.00 budget.
C) among which he is indifferent.
D) that give him the same marginal rate of substitution.
E) None of the above answers is correct.

Question

Quizplus · Accepted Answer

The concept of an indifference curve is that it represents combinations of two goods that provide the same level of satisfaction or utility to the consumer. In other words, the consumer is indifferent between any two points on the same indifference curve. Therefore, the correct answer is that the combinations of gasoline and coffee along one of Sam's indifference curves are among which he is indifferent. Choices A and D may be true for some other concept, but they do not describe indifference curves. Choice B is not necessarily true, as some combinations may be outside of Sam's budget constraint. Choice E is not correct as choice C is the correct answer.

Sam's Budget Is $60