Economics (AS & A Level) · Oct / Nov 2025 · Paper 34 · Question 2
9708Indifference curves and budget lines
The diagram shows two indifference curves. What do indifference curves indicate?
- AConsumers get more satisfaction on curve I1 from consuming more of X and less of Y.
- BConsumers get more satisfaction on curve I2 from consuming less of X and more of Y.
- CEach point on the curve represents the marginal rate of substitution of good X for good Y.
- DMovement from I1 to I2 cannot be made unless the indifference curves cross.
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Correct answer: C. Each point on the curve represents the marginal rate of substitution of good X for good Y.
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