Which of the Following Statements Concerning Indifference Curves Is Correct

question 15

Multiple Choice

Which of the following statements concerning indifference curves is correct?

• A)An indifference curve is the locus of points describing proportional price levels of the two goods.
• B)Indifference curves presuppose the measurement of total utility and marginal utility.
• C)An indifference curve is the locus of points representing various combinations of two goods about which the consumer is indifferent.
• D)Indifference curves presuppose the validity of the "law of diminishing returns."
• E)None of the above.

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Definitions:

Production Level

The quantity of goods or services that are produced within a given timeframe by a business.

Fixed Costs

Costs that do not change with the level of production or sales over a certain period.

Volume Of Activity

A measure of the total amount of work performed or output produced in a specific period.

Margin Of Safety

Margin of safety is the difference between actual or projected sales and the sales level at which the business breaks even.