Answer to Question #233134 in Microeconomics for Binaya

Question

What is an indifference curve? Explain the properties of indifference curve

Answer 1

Solution:

An indifference curve refers to a graph that shows all the combinations of two goods that gives the consumer equal satisfaction and utility. An indifference curve joins all points representing bundles that are considered indifferent by the consumer and all points give him the same utility.

 

The properties of an indifference curve include the following:

·        The indifference curves are downward sloping to the right.

·        The indifference curves are convex to the origin.

·        The indifference curves cannot intersect each other.

·        Higher indifference represents higher utility.