An indifference curve is a graph showing combination of two goods that give the consumer equal satisfaction and utility. Each point on an indifference curve indicates that a consumer is indifferent between the two and all points give him the same utility.

I..think ..it is also PPC (production possibility curve)...it shows the... production possibility ...of two goods ... with the .. given ...use of resources and technology....

Indifference curve represents

An indifference curve is a graphical representation in economics that shows the different combinations of two goods that a consumer considers equally preferable. It represents the various levels of satisfaction or utility that a consumer derives from different combinations of goods. Each point on the curve represents a specific combination of goods, and the consumer is indifferent or equally satisfied with any point on the same curve.

Indifference curve and the number of commodities represented

The question asks about the number of commodities represented by an indifference curve. The correct answer is C: Only two commodities.

Explanation

An indifference curve represents the different combinations of two goods. These two goods could be any two commodities or items that a consumer consumes or purchases. The indifference curve does not represent four commodities (option A) because it only focuses on two goods at a time. Similarly, it does not represent less than two commodities (option B) as it always requires at least two goods to create an indifference curve.

While it is true that consumers may consume or purchase more than two commodities in reality, an indifference curve only represents the preferences and trade-offs between two specific goods. When analyzing the relationship between more than two commodities, economists typically use multiple indifference curves to represent different combinations of goods.

Why an indifference curve represents only two commodities

1. Utility maximization: Indifference curves are used to analyze consumer preferences and choices. By representing only two commodities on the curve, economists can focus on the specific trade-offs and preferences between those two goods.

2. Simplification: By limiting the representation to two commodities, economists can create a clear and understandable graphical representation of consumer preferences. Including more than two commodities on a single curve would make the analysis complex and difficult to interpret.

3. Ceteris paribus assumption: Indifference curves assume that all other factors affecting consumer choices remain constant. By focusing on two commodities, economists can isolate the specific preferences and trade-offs between those goods, assuming that other factors remain the same.

4. Comparative analysis: Indifference curves allow economists to compare the relative preferences between different combinations of two goods. This comparative analysis helps in understanding consumer behavior and decision-making.

In conclusion, an indifference curve represents the different combinations of two commodities that a consumer considers equally preferable. It does not represent four commodities, less than two commodities, or more than two commodities. By focusing on two goods, economists can analyze and compare consumer preferences and choices in a simplified and understandable manner.