Set of all possible combinations of the two inputs that yield the same maximum possible level of output is known as.........

Option 1 -> Indifference Curve represents combinations of two goods that provide equal satisfaction to a consumer (consumer theory, not production).

Option 2 -> Production Possibility Curve shows maximum output combinations of two different products an economy can produce with given resources.

Option 3 -> Isoquant represents all combinations of two inputs that produce the same level of output.

Option 4 -> Budget Line shows combinations of two goods a consumer can buy with a given income and prices.

Hence, Isoquant -> An isoquant (iso = equal, quant = quantity) is a curve in production theory that shows all possible combinations of two inputs (such as labor and capital) that yield the same level of output. For example, a firm might produce 100 units using either 10 workers with 5 machines, or 5 workers with 10 machines. These different input combinations lie on the same isoquant. This concept is analogous to indifference curves in consumer theory, but applies to production rather than consumption. -> correct