Along an indifference curve for goods X and Y, the vertical and horizontal axes measure the:
A) prices of X and Y.
B) total utilities of X and Y.
C) quantities of X and Y.
D) marginal utilities of X and Y.

Question

Quizplus · Accepted Answer

Indifference curves depict the combinations of two goods that give a consumer equal levels of satisfaction, hence the axes represent the quantities of X and Y, not their prices or utilities. Marginal utilities do not directly factor into the shape of the curve, but rather play a role in determining the slope of the curve.

Along an Indifference Curve for Goods X and Y, the Vertical