An illustration of an indifference curve has:
A)prices of the goods on the axes.
B)quantities of the goods on the axes.
C)price on the vertical axis, quantity on the horizontal axis.
D)Price on the horizontal axis, quantity on the vertical axis.

Question

Quizplus · Accepted Answer

Indifference curves show different combinations of two goods that give the same level of satisfaction or utility to a consumer. This means that one cannot determine prices of the goods from an indifference curve. Therefore, quantities of the two goods are typically plotted on the axes of an indifference curve. An indifference curve shows combinations of two goods that give a consumer equal satisfaction or utility. Therefore, the quantities of the two goods are plotted on the axes. The prices of the goods are not relevant to the shape or position of the curve, and are therefore not included in the illustration.

An Illustration of an Indifference Curve Has