An indifference curve shows a combination of two goods that give a consumer equal satisfaction and utility thereby making the consumer indifferent. Along the curve, the consumer has an equal preference for the combinations of goods shown—i.e. is indifferent about any combination of goods on the curve.

What is indifference curve and its characteristics?

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.

What is indifference curve explain the characteristics of indifference curve? 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.

What is indifference curve explain any three characteristics?

Indifference curves slop downward to the right. 2. Every indifference curve to the right represents a higher level of satisfaction. 3. Indifference curves cannot intersect each other.

What is indifference curve importance?

The indifference curve technique has come as a handy tool in economic analysis. It has freed the theory of consumption from the unrealistic assumptions of the Marshallian utility analysis. In particular, mention may be made of consumer’s equilibrium, derivation of the demand curve and the concept of consumer’s surplus.

What is the concept of indifference curve?

An indifference curve shows a combination of two goods that give a consumer equal satisfaction and utility thereby making the consumer indifferent. Along the curve, the consumer has an equal preference for the combinations of goods shown—i.e. is indifferent about any combination of goods on the curve.

What are the types of indifference curve?

Indifference curves for normal goods, substitutes and perfect complements.

What are the 6 properties of indifference curve?

  • They Slope Negatively or Slope Downwards from the Left to the Right: …
  • They are Convex to the Origin of Axes: …
  • Every Indifference Curve to the right represents Higher Level of Satisfaction than that of the Proceeding One:

What are the five properties of indifference curve?

  • (1) Indifference Curves Slope Downward from Left to Right:
  • (2) Indifference Curves are Convex to Origin:
  • (3) Two Indifference Curves cannot Touch or Intersect Each Other:
  • (4) Higher Indifference Curves Represent Higher Level of Satisfaction:

Who gave the concept of indifference curve?

Developed by the Irish-born British economist Francis Y. Edgeworth, it is widely used as an analytical tool in the study of consumer behaviour, particularly as related to consumer demand.

Why is it called indifference curve?

An indifference curve is a curve that represents all the combinations of goods that give the same satisfaction to the consumer. Since all the combinations give the same amount of satisfaction, the consumer prefers them equally. Hence the name indifference curve.

What are the assumptions of indifference curve?

Assumptions of Indifference Curve Analysis: (1) The consumer acts rationally so as to maximise satisfaction. (2) There are two goods X and Y. (3) The consumer possesses complete information about the prices of the goods in the market.

What is budget line and indifference curve?

An indifference curve is a line showing all the combinations of two goods which give a consumer equal utility. In other words, the consumer would be indifferent to these different combinations. Example of choice of goods which give consumers the same utility.

What is indifference curve example?

An indifference curve shows all combinations of goods that provide an equal level of utility or satisfaction. For example, Figure 1 presents three indifference curves that represent Lilly’s preferences for the tradeoffs that she faces in her two main relaxation activities: eating doughnuts and reading paperback books.

Can indifference curve be concave?

Yes, an indifference curve can be concave. The concave shape of the indifference curve is an exception to the properties of the indifference curve….

What is an example of indifference?

Unemotional apathy. … The definition of indifference is a lack of care, concern or interest. An example of indifference is when you don’t care or put effort into something.