Question on: JAMB Economics - 2024
When combination of two goods which a consumer derive equal satisfaction is plotted on a graph, the graph is known as
A
opportunity curve
B
utility curve
C
demand curve
D
indifference curve
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Correct Option: D
The correct answer is the indifference curve. Here's why:
- Indifference Curve: An indifference curve represents all combinations of two goods that provide a consumer with the same level of satisfaction (utility). The consumer is indifferent between any point on the curve.
- Opportunity Curve: This is not a standard term in economics. It could be confused with the Production Possibility Frontier (PPF), which illustrates the maximum output combinations of two goods that can be produced with available resources.
- Utility Curve: Utility curves typically show the relationship between the quantity of a good consumed and the level of satisfaction or utility derived. However, a curve showing combinations of two goods with equal satisfaction is specifically the indifference curve.
- Demand Curve: A demand curve shows the relationship between the price of a good and the quantity demanded by consumers.
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