The correct answer is: A. Equal utility.
An indifference curve is a graph showing combinations of goods that provide the same level of satisfaction to a consumer. In other words, a consumer is indifferent between any two points on the same indifference curve.
The slope of an indifference curve is negative, which means that as a consumer consumes more of one good, they must consume less of another good in order to maintain the same level of satisfaction. The slope of an indifference curve is also diminishing, which means that the consumer is willing to give up less of one good to obtain more of another good as they consume more of the first good.
The concept of indifference curves is used in economics to analyze consumer behavior. Indifference curves can be used to determine a consumer’s optimal consumption bundle, which is the combination of goods that maximizes the consumer’s satisfaction.
Here is a brief explanation of each option:
- Option A: Equal utility. This is the correct answer. An indifference curve shows combinations of goods that provide the same level of satisfaction to a consumer.
- Option B: Equal output. This is incorrect. An indifference curve does not show combinations of goods that produce the same amount of output.
- Option C: Different output. This is incorrect. An indifference curve does not show combinations of goods that produce different amounts of output.
- Option D: Different utility. This is incorrect. An indifference curve shows combinations of goods that provide the same level of satisfaction to a consumer.