What do indifference curves graphically represent?
What do indifference curves graphically represent?
An indifference curve is drawn on a budget constraint diagram that shows the tradeoffs between two goods. All points along a single indifference curve provide the same level of utility. Higher indifference curves represent higher levels of utility.
What does indifference curve does not intersect each other?
Indifference curves cannot intersect each other as it would break down the indifference curve analysis. This is because the consumer would have more than one point on the indifference curve giving him a different level of satisfaction.
Why indifference curve Do not touch or intersect the axes?
Indifference curves do not touch either axes If an indifference curve touches horizontal axis or vertical axis, it implies that the customer prefers only one commodity because when it touches axes, one of the commodities becomes zero quantity. This violates the basic definition of an indifference curve.
Which of the graphs illustrates indifference curves for which the marginal rate of substitution is constant?
Which of the graphs illustrates indifference curves for which the marginal rate of substitution is constant? Feedback: Correct. In the special case where goods X and Y are perfect substitutes, the marginal rate of substitution is constant, and the indifference curves are straight lines.
Can indifference curve be concave?
If the marginal rate of substitution is increasing, the indifference curve will be concave, which means that a consumer would consume more of X for the increased consumption of Y and vice versa, but this is not common.
Which of the following is true when two indifference curves intersect each other?
Two indifference curves cannot intersect each other.
Why indifference curves are convex?
The indifference Curve is convex to origin because of decreasing MRS (Marginal rate of substitution). The curve represents the marginal rate of substitution. Hence, option (a) is correct.
Can indifference curves intersect?
Along the curve, the consumer has an equal preference for the combinations of goods shown—i.e. is indifferent about any combination of goods on the curve. Typically, indifference curves are shown convex to the origin, and no two indifference curves ever intersect.
What does horizontal indifference curve mean?
An IC curve that is horizontal indicates that consumer derives no more satisfaction from additional units of good on the horizontal axis.
Can indifference curves be horizontal?
So an indifference curve cannot be horizontal. In Figure 4 (C) the indifference curve is shown as vertical and combination В is preferred to A as the consumer has more of Y and the same quantity of X. Therefore, an indifference curve cannot be vertical either.
Why indifference curve is convex to the origin?
Is indifference curve concave or convex?
An indifference curve is convex to the point of origin. They are convex because as the consumer begins to increase his or her use of one good over another, the curve represents the marginal rate of substitution.
Why indifference curve is convex?
Which among the following is not true about indifference curve?
Answer : Two regular convex to origin indifference curves can intersect each other. This statement is not true because indifference curves can never intersect. An indifference curve is a graph showing a combination of two goods that give the consumer equal satisfaction and utility.
Which one of the following is not a property of indifference curve?
‘Indifference curves of imperfect substitutes are concave to the origin’ is not the basic property of indifference curves.
Why indifference curve is concave?
An indifference curve concave to the origin would represent increasing marginal rate of substitution.
Is the property of indifference curve that no two IC can intersect each other the reason behind this is?
If two indifference curves intersects each other than there would be more than one equilibrium or more than one point where the customer can get maximum satisfaction. This violates the laws of indifference curve.
Can two indifference curves intersect explain your answer quizlet?
Explain why two indifference curves cannot intersect. more is preferred to less. But this violates transitivity, so indifference curves must not intersect.
Why can’t indifference curves intersect?
Why Can’t Indifference Curves Intersect? According to Digital Economist, indifference curves do not intersect due to transitivity and non-satiation. In order for two curves to intersect, there must a common reference point.
What is the difference between indifference curve and non-satiation?
In order for two curves to intersect, there must a common reference point. That is impossible with indifference curves. Transitivity means that consumers make rational decisions when they determine which good and how much of a good to buy. Non-satiation describes the assumption that consumers want as much of a good as possible.
What are the three types of indifference curves?
In the graph below, there are three different indifference curves, labeled A, B, and C. The farther from the origin, the greater utility is generated across all consumption bundles on the curve. If a good satisfies all four properties of indifference curves, the goods are referred to as ordinary goods.
What does a sloping down indifference curve indicate?
The sloping down indifference curve indicates that when the amount of one commodity in the combination is increased, the amount of the other commodity is reduced. This must be so if the level of satisfaction is to remain constant on the same indifference curve.