An Indifference Curve Shows

question 27

Multiple Choice

An indifference curve shows

• A)the maximum combinations of two products that a consumer can afford to buy, given prices and the consumer's income.
• B)the quantities of two products a consumer is willing to buy at different income levels.
• C)all combinations of two products from which the consumer derives a specific level of total utility.
• D)combinations of two products that yield the same marginal utilities.

---

Definitions:

Factory Overhead

Refers to the indirect manufacturing costs that are not directly tied to the production of goods, such as utilities, maintenance, and rent of the factory building.

Direct Labor Costs

Expenses related to the wages of employees who are directly involved in the production of goods or delivery of services.

Cost of Materials Used

The total cost of raw materials that have been consumed in the production process, directly contributing to the manufacture of products.

Current Ratio

A liquidity ratio that measures a company's ability to pay off its short-term liabilities with its short-term assets.