An Indifference Curve Shows All Combinations of Two Goods

question 57

Multiple Choice

An indifference curve shows all combinations of two goods

• A) that can be purchased with a given income.
• B) that can be purchased if relative prices are constant.
• C) among which the consumer is indifferent.
• D) that have the same marginal rate of substitution.
• E) that have the same opportunity cost.

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Definitions:

Cirque

An open-sided, bowl-shaped depression formed in a mountain, commonly at the head of a glacial valley; produced by erosion of a glacier.

Depression

A geological formation resulting from the sinking of the Earth's surface, forming a bowl-like or flat area lower than the surrounding ground.

Valley

An elongated lowland between ranges of mountains or hills, often having a river or stream running along the bottom.

Ridge

On a weather map, an elongated area of high atmospheric pressure.