An indifference curve shows
A) different combinations of income and prices at which an individual can afford equal quantities of two goods
B) different combination of goods that all cost the same
C) different quantities of current and future consumption that are consistent with the intertemporal budget constraint
D) different combinations of goods that yield the same level of satisfaction
E) different levels of satisfaction that can be obtained from a given budget constraint

Question

Quizplus · Accepted Answer

An indifference curve represents different combinations of goods that yield the same level of satisfaction for an individual. It shows the preferences of the individual, indicating that the individual is indifferent between any two points on an indifference curve. The curve slopes downwards, indicating that the individual is willing to give up some of one good to obtain more of the other, while still maintaining the same level of satisfaction.

An Indifference Curve Shows