An indifference curve represents bundles of goods that a consumer (choose all correct answers):

Question

BlackTom AI · Accepted Answer

The question asks us to evaluate what an indifference curve represents for a consumer, selecting all correct statements.
Option a: 'Refers to any other bundle of goods' — This is not accurate. An indifference curve does not denote every possible bundle; it represents a specific set of bundles that yield the same satisfaction, not just any bundle.
Option b: 'Views as equally affordable' — This is incorrect. Affordability is determined by the consumer's budget and prices, which together define the budget line, not the indifference curve itself.
Option c: 'Ranks from most preferred to least preferred' — This is misleading. An indifference curve groups bundles that are equally preferred, i.e., they provide the same level of utility; it does not by itself rank bundles from most to least preferred along the curve.
Option d: 'Views as equally desirable' — This is correct. By definition, all bundles on a single indifference curve are equally desirable (provide the same level of utility) to the consumer.
Taken together, only option d correctly describes the essence of an indifference curve; the other statements misstate its purpose or relation to budget and ranking.

SESS0007_24-25 Mock test (shortened) for Assessment 1

An indifference curve represents bundles of goods that a consumer (choose all correct answers):

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