An indifference curve shows a combination of two goods that give a consumer equal satisfaction and utility thereby making the consumer indifferent. Typically, indifference curves are shown convex to the origin, and no two indifference curves ever intersect.

Why do two IC curves not intersect each other?

Indifference curves cannot intersect each other as it would break down the indifference curve analysis. This is because the consumer would have more than one point on the indifference curve giving him a different level of satisfaction.

What is an indifference curve explain its properties?

Definition: 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.

Why do consumers prefer higher indifference curves?

Since a higher indifference curve represents a higher level of satisfaction, a consumer will try to reach the highest possible IC to maximize his satisfaction. In order to do so, he has to buy more goods and has to work under the following two constraints: He has to pay the price for the goods and.

Can indifference curves be thick?

The indifference curves cannot be thick because if they are thick, they would be violating the non-satiation assumption. Because two combinations having different utility levels cannot be on same indifference curve, it cannot be thick.

Can two indifference curves intersect explain your answer quizlet?

Explain why two indifference curves cannot intersect. more is preferred to less. But this violates transitivity, so indifference curves must not intersect.

What are the four properties of indifference curves?

The four properties of indifference curves are: (1) indifference curves can never cross, (2) the farther out an indifference curve lies, the higher the utility it indicates, (3) indifference curves always slope downwards, and (4) indifference curves are convex.

Why can’t indifference curves be upward sloping?

A set of indifference curves can be upward sloping if we violate assumption number three; more is preferred to less. When a set of indifference curves is upward sloping, it means one of the goods is a “bad” so that the consumer prefers less of that good rather than more.

Why can indifference curves not be thick?

What does a thick indifference curve mean?

When we make a thick indifference curve, it violates the non-satiatioj assumption, which means that the point 2 in the figure has more quantity than point 1, but you are indifferent between them because they lie on same curve, which contradicts, so it cannot be possible.

Why are indifference curves convex?

Indifference curves are convex to the origin because as the consumer begins to increase his or her use of one good over another, the curve represents the marginal rate of substitution. The marginal rate of substitution goes down as the consumer gives up one good for another, so it is convex to the origin.

What is Mrs microeconomics?

In economics, the marginal rate of substitution (MRS) is the amount of a good that a consumer is willing to consume in relation to another good, as long as the new good is equally satisfying.

Can indifference curves be concave?

Indifference curves can be straight lines if a slope is constant, resulting in an indifference curve represented by a downward-sloping straight line. If the marginal rate of substitution is increasing, the indifference curve will be concave to the origin.

Who uses indifference curve?

The indifferent curve analysis is used in measuring the cost of living or standard of living in terms of index numbers. We come to know with the help of index numbers whether the consumer is better off or worse off by comparing two time periods when the income of the consumer and prices of two goods change.

Which one is not property of indifference curves?

Indifference curves of imperfect substitutes are concave to the origin is not the basic property of Indifference curve.

Can a indifference curve be upward sloping?

In that case, a set of indifference curves is upward sloping. The positive slope means that the consumer will accept more of the bad good only if she also receives more of the other good in return.

What is a convex indifference curve?

Convexity of indifference curves implies that the marginal rate of substitution of X for Y falls as more of X is substituted for Y. Thus, indifference curves are convex to the origin when principle of diminishing marginal rate of substitution holds good and which is generally the case.