What is indifference curve? Explain it's properties.
Dear Student,
Answer to your question is as follows :
Indifference Curve
An indifference curve shows various combination of two goods that provide the consumer the same level of satisfaction.
In other words, it shows those combinations of two goods between which the consumer is indifferent.
Properties
1. DOWNWARD SLOPING TO THE RIGHT : because if a consumer decides to have more units of one good,he will have to sacrifice some units ogf another good so that the level of satisfaction remains the same
2. CONVEX TO THE ORIGIN : because of diminishing marginal rate of substitution.it means means as the consumer has more n more quantity of of x its marginal significance to him declines n marginal significance of scarce commodity y goes up.
3. 2 INDIFFERENCE CURVE CAN NEVER INTERSECT EACH OTHER : because 2 indifference curve cant show same level of satisfaction.
4. HIGHER INDIFFERENCE CUVE REPRESENTS HIGHER LEVEL OF SATISFACTION : this is because higher curve has more quantity of both the commodities
Regards
Dear Student,
Answer to your question is as follows :
Indifference Curve
An indifference curve shows various combination of two goods that provide the consumer the same level of satisfaction.
In other words, it shows those combinations of two goods between which the consumer is indifferent.
Properties
1. DOWNWARD SLOPING TO THE RIGHT : because if a consumer decides to have more units of one good,he will have to sacrifice some units ogf another good so that the level of satisfaction remains the same
2. CONVEX TO THE ORIGIN : because of diminishing marginal rate of substitution.it means means as the consumer has more n more quantity of of x its marginal significance to him declines n marginal significance of scarce commodity y goes up.
3. 2 INDIFFERENCE CURVE CAN NEVER INTERSECT EACH OTHER : because 2 indifference curve cant show same level of satisfaction.
4. HIGHER INDIFFERENCE CUVE REPRESENTS HIGHER LEVEL OF SATISFACTION : this is because higher curve has more quantity of both the commodities
Regards
