Answer to Question #134652 in Microeconomics for Wajahat

Question

Show that indifference curves are (a) convex to the origen (b) cannot intersect one another? what behaviour assumption must be true in each case.

Answer 1

solution

indifference curves are the relation between good x and good y such that for every point on curve consumer remain satisfied.

(a) indifference curve are convex to the origin because it follow the law of diminishing marginal rate of substitution of X for Y.every point on curve represent the bundle of good x and good y if quantity of good x will increase then quantity of good y will be decrease.if good y will be consumed more and more then x will be consumed less and less.

(b)two indifference curve can not cross each other because every curve give different sanctification to the consumer if curve will higher and higher then degree of satisfaction will be higher.and satisfaction for consumer is different for every curve if they will intersect then there will be a point at which satisfaction of consumer for this point of intersection should be same

which is practically and logically not possible, so we can say that two indifference curve can never intersect.