PROPERTIES OF INDIFFERENCE CURVES

PROPERTIES OF INDIFFERENCE CURVES

An indifference curve shows all combinations of two goods which yield the same level of utility or satisfaction to the consumer. An indifference curve shows combination of

goods between which a person is indifferent. The main attributes or properties or characteristics of indifference curves are as follows:

(1)     Indifference curves are negatively sloped. The indifference curves must slope down from left to right. This means that an indifference curve is negatively sloped. It slopes downward because as the ‘consumer increases the consumption of X commodity, he has to give up certain units of Y commodity in order to maintain the same level of satisfaction.ghee and commodity wheat is shown by the points a and b on the same difference curve. The consumer is  indifferent towards points a and b as they represent

levels of satisfaction. A higher indifference curve that lies above and to the right of another indifference curve represents a higher level of satisfaction and combination on a lower indifference curve yields a lower satisfaction.

In other words we can say that the combination of goods which lies on a higher indifference curve contains all along its length larger quantity of goods than the lower one.

a greater amount of satisfaction as it contains more of both goods than IC2 and I01 (IC3 > IC2 > 1 c 1 ) .

(1)     Indifference curves are convex to the origin. This is an important property of indifference curves. They are convex to the origin (bowed inward). This is equivalent to saying that as the consUmer substitutes commodity X for commodity Y, the marginal rate of substitution diminishes of good X for good Y along anindifference curve.

In this figure (3.6) as the consumer moves down from A to B to C to D, the willingness to substitute good X for good Y diminishes. This

equal level of satisfaction. At point (a) on the indifference curve, the consumer is satisfied with OE units of ghee and OD units of wheat. He is equally satisfied with OF units of ghee and OK units of wheat shown by point b on the indifference curve. It is only on the negatively sloped curve that different points representing different combinations of goods X and Y give the same level 1-.)f satisfaction to make the consumer indifferent. The slope .of an indifference curve implies that the two goods are substitutes for one another.

(1)     Higher indifference curve represents higher

a greater amount of satisfaction as it contains more of both goods than IC2 and I01 (IC3 > IC2 > 1 c 1 ) .

(1)     Indifference curves are convex to the origin. This is an important property of indifference curves. They are convex to the origin (bowed inward). This is equivalent to saying that as the consUmer substitutes commodity X for commodity Y, the marginal rate of substitution diminishes of good X for good Y along an indifference curve.

In this figure (3.6) as the consumer moves down from A to B to C to D, the willingness to substitute good X for good Y diminishes. This

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