Explain four main properties of indifference curves.
Explain four main properties of indifference curves.
The principle characteristics of indifference curves (IC) are as follows:
(i) Indifference curves are negatively-sloped or downward-sloping: An indifference curve slopes downwards from left to right. It shows that more of one commodity implies less of the other, so that the total satisfaction (at any point on the IC) remains constant.
(ii) Indifference curves are convex to the point of origin: An indifference curve will ordinarily be convex to the point of origin. This is because of diminishing marginal rate of substitution.
(iii) Higher indifference curve represents higher level of satisfaction: On an indifference map, a higher indifference curve represents those combinations which yield higher level of satisfaction than combinations on the lower indifference curves. The assumption of monotonic preferences of the consumer permits us to conclude that greater the consumption, higher must be the level of satisfaction.
(iv) Indifference curves never intersect one another: As each IC represents one level of satisfaction which remains constant, two different indifference curves can never cross or intersect each other.
The principle characteristics of indifference curves (IC) are as follows:
(i) Indifference curves are negatively-sloped or downward-sloping: An indifference curve slopes downwards from left to right. It shows that more of one commodity implies less of the other, so that the total satisfaction (at any point on the IC) remains constant.
(ii) Indifference curves are convex to the point of origin: An indifference curve will ordinarily be convex to the point of origin. This is because of diminishing marginal rate of substitution.
(iii) Higher indifference curve represents higher level of satisfaction: On an indifference map, a higher indifference curve represents those combinations which yield higher level of satisfaction than combinations on the lower indifference curves. The assumption of monotonic preferences of the consumer permits us to conclude that greater the consumption, higher must be the level of satisfaction.
(iv) Indifference curves never intersect one another: As each IC represents one level of satisfaction which remains constant, two different indifference curves can never cross or intersect each other.
