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What is an indifference curve?
Why is a consumer indifferent between points along an indifference curve?
What is indifference curve in consumer choices?
What does the downward slope of the indifference curve mean?
In economics, an indifference curve connects points on a graph representing different quantities of two goods, points between which a consumer is indifferent. That is, any combinations of two products indicated by the curve will provide the consumer with equal levels of utility, and the consumer has no preference for one combination or bundle ...
An indifference curve shows combinations of goods that provide an equal level of utility or satisfaction. For example, Figure B1 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.
Jul 17, 2023 · Because all points along an indifference curve generate the same level of utility, economists say that a consumer is indifferent between them. Figure 7.10 shows an indifference curve for combinations of skiing and horseback riding that yield the same level of total utility.
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.
In short, the slope of the indifference curve changes because the marginal rate of substitution—that is, the quantity of one good that would be traded for the other good to keep utility constant—also changes, as a result of diminishing marginal utility of both goods.
7.3 Indifference Curve Analysis: An Alternative Approach to Understanding Consumer Choice – Principles of Economics. Learning Objectives. Explain utility maximization using the concepts of indifference curves and budget lines. Explain the notion of the marginal rate of substitution and how it relates to the utility-maximizing solution.
Learning Objective 1.2: Define and draw an indifference curve. Individual preferences, given the basic assumptions, can be represented using something called indifference curves. An indifference curve is a graph of all the combinations of bundles that a consumer prefers equally.
