Which curve shows all combinations of two goods that give a consumer equal satisfaction?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. Indifference curve.
An Indifference curve represents various combinations of two commodities that provide a consumer with the same level of total satisfaction or utility. Since the satisfaction level remains constant along the curve, the consumer is "indifferent" toward any specific point on it.
These curves are typically downward sloping and convex to the origin due to the Diminishing Marginal Rate of Substitution (MRS), meaning as a consumer gets more of one good, they are willing to give up less of the other.