Which curve shows all combinations of two goods that give a consumer equal satisfaction?
- (a)Indifference curve
- (b)Budget constraint
- (c)Isoquant curve
- (d)Marginal cost curve
Answer
Why
Correct — A. An indifference curve joins bundles of two goods between which the consumer is indifferent: every point on it gives the same satisfaction.
The stem describes exactly that, two goods, one consumer, equal satisfaction → option (a).
Why the others are wrong
- (b)Budget constraint — A budget line shows the bundles a consumer can afford at given prices and income. It marks what is affordable, not what is equally satisfying.
- (c)Isoquant curve — An isoquant belongs to production: it joins combinations of two inputs that yield the same output. The indifference curve is its consumer counterpart.
- (d)Marginal cost curve — The marginal cost curve shows the cost of producing an additional unit of output. It is a firm's cost curve, not a map of a consumer's tastes.
Concept
Consumer theory maps tastes with a family of indifference curves, one for each level of satisfaction.
Each curve slopes downward: more of one good must be offset by less of the other. Curves are convex to the origin, never cross, and a higher curve means greater satisfaction.
The consumer's best choice is where the budget line is tangent to the highest indifference curve it can reach.
The stem pairs two goods with a consumer. An isoquant pairs two inputs for a producer, so that pairing alone sorts the options.
Key facts
- An indifference curve joins bundles of two goods that give a consumer equal satisfaction.
- The slope of an indifference curve is the marginal rate of substitution (MRS).
- An isoquant joins input combinations giving the same output, and its slope is the marginal rate of technical substitution.
- The consumer's optimum is where the budget line is tangent to an indifference curve.
Study next
Common traps
- Swapping isoquant and indifference curve: one is about inputs and output, the other about goods and satisfaction.
- Reading the budget line as a satisfaction curve: it shows only what the consumer can afford.
The item gives the definition and offers curves from production and cost theory as distractors, so first place each curve in consumer, producer or cost theory.
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