Indifference Curve/Budget Line

Question 1

What is an indifference curve?

Answer 1

This may be defined as a locus of points giving a particular combination of goods that yield equal satisfaction. How we ration our choice due to our income between 2 commodities.

Question 2

___________ is the hindrance of rationalists

Answer 2

Income

Question 3

What is an Indifference Map?

Answer 3

Many indifference curves on a graph

Question 4

List the properties of the Indifference Curve

Answer 4

1. It is negatively sloped
2. It is connected to the origin
3. It cannot touch or intercept each other
4. A higher level of indifference curve represents a high level of satisfaction

Question 5

What is a budget line?

Answer 5

A graphical representation of the possible combination of 2 goods that can be purchased with given prices and income.

Question 6

When is a Consumer at Equilibrium?

Answer 6

The indifference curve intercepts the budget line