Higher indifference curve denotes a higher level of satisfaction. Higher indifference curve represents large bundle of goods, which means more utility because of monotonic preference. In the image we see, that IC2 gives more satisfaction than IC1 and IC3 gives more satisfaction than both IC1 and IC2.

Which indifference curve gives the highest level of satisfaction?

Budget Line Since a higher indifference curve represents a higher level of satisfaction, a consumer will try to reach the highest possible IC to maximize his satisfaction.

Why does lower indifference curve give lower satisfaction?

Indifference curves like Um are steeper on the left and flatter on the right. The reason behind this shape involves diminishing marginal utility—the notion that as a person consumes more of a good, the marginal utility from each additional unit becomes lower.

What is indifference curve explain with diagram?

Definition: An indifference curve is a graph showing combination of two goods that give the consumer equal satisfaction and utility. Description: Graphically, the indifference curve is drawn as a downward sloping convex to the origin. The graph shows a combination of two goods that the consumer consumes.

How do you interpret an indifference curve?

An indifference curve shows a combination of two goods that give a consumer equal satisfaction and utility thereby making the consumer indifferent. 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.

What is the characteristics of indifference curve?

The very important feature of the indifference curves is that they are convex to the origin and they cannot be concave to the origin. A normal indifference curve will be convex to the origin and it cannot be concave. Only convex curves will lend to the principles of Diminishing Marginal Rate of substitution.

What are the features of indifference curve?

Characteristics of Indifference Curves

• Indifference curves slop downward to the right.
• Every indifference curve to the right represents a higher level of satisfaction.
• Indifference curves cannot intersect each other.
• Indifference curve will not touch the axis.
• Indifference curves are convex to the origin.

  Who gave indifference curve analysis?

  Developed by the Irish-born British economist Francis Y. Edgeworth, it is widely used as an analytical tool in the study of consumer behaviour, particularly as related to consumer demand.

  What is the properties of indifference curve?

  The four properties of indifference curves are: (1) indifference curves can never cross, (2) the farther out an indifference curve lies, the higher the utility it indicates, (3) indifference curves always slope downwards, and (4) indifference curves are convex.

  Which is true about a higher indifference curve?

  Higher Indifference Curve represents higher level of satisfaction to the consumer’. Explain the statement, Higher Indifference Curve represents higher level of satisfaction to the consumer’. Explain the statement, also state the underlying assumption related to this property of Indifference Curve. Please log in or register to add a comment.

  Which is a peculiar case of a demand curve?

  The peculi­arity of this case lies in the fact that each of an array of prices, say, p x(1), p x(2), p x(3) ,… of good X implicit in the budget lines H 1, H 2, H 3 ,… will give us the same equilibrium of the consumer at the point A.

  Why does a demand curve slope to the right?

  Normally, the demand curve of an individual for a certain good slopes downward towards right because of the income effect and the substitution effect of a change in its price. But in some cases, we may have abnormal or ‘pathological’ demand curves. One such case is the case of a Giffen good.

  Why are some demand curves pathological in nature?

  It occurs because, after a point, the preference pattern of the consumer makes the good ‘strongly’ inferior to him vis-a-vis other goods, although the good remains an MIB. There may, however, be some other pathological cases that may be obtained because of departure from the axioms of ordinal utility.