PROPERTIES OF INDIFFERENCE CURVE

NAME:SAQUIB JAMIL
UID :0704220131
ROLL NUMBER : 224515
PAPER NAME : INTRODUCTORY MICROECONOMICS
PAPER CODE : CC1
 WHAT IS INDIFFERENCE CURVE?

An Indifference curve is a curve that

represents all those combinations of
goods that give some satisfaction to the
consumer. It is the locus of the point
representing pairs of quantities in
between which the individual is
indifferent so it is termed as indifference
curve.

INDIFFERENCE CURVE

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PROPERT IES OF INDIFFERENCE CURVE WITH
DIAGRAM
1. All Combinations on an Indifference
Curve Give Same Level of Satisfaction

As we defined the indifference curve giving

the same level of satisfaction with the different
points of combinations of two commodities A,
B, C, D and E combinations.

In the diagram, clearly shows and clarifies

characteristic of an indifference curve.

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2. A Higher Difference Curve Shows a Higher Level of Satisfaction

Another characteristic of the

indifference curve is that hire the
indifference curve higher will be
the level of satisfaction.
It has been so and diagrams were
IC1, IC2 and IC3 indifference curve
so different levels of satisfaction
from the point of the level of
satisfaction.
They can be put in the order of
preference like
IC3>IC2>IC1respectively.

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3. Indifference Curves always Slope Downwards from Left to
Right

An Indifference curve is definite as a curve on

which all the combinations of two commodities
give a consumer equal satisfaction.
It follows that if a consumer wants to have more
quantity of commodity X, he will have to give up
some quantity of commodity Y in order to derive
the same level of satisfaction.
If a consumer could have more of one
commodity without a corresponding fail in other
commodities he would have achieved a higher
level of satisfaction.
Plotting on a graph the different combinations
that contain more of one commodity and less of
another would give a downward-sloping curve.

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4. Indifference Curves Never Cut Each Other

The reasoning behind this assumption is

that:
(1) Each indifference curve represents a
different level of satisfaction and.
(2) Each point on an indifference curve
gives a level of equal satisfaction.
Hence, no point On two different
indifference curves can be common to
each; The two curves will have to be
perfectly independent of each other.

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5. An Indifference Curve Neither Touches Horizontal Axis Nor Vertical
Axis

Another characteristic of the indifference curve is

that an indifference curve does not touch the x-
axis.
If it does so it means he consumes the very large
amount of commodity X and zero amount of
commodity Y.
If the indifference curve touches the vertical
line(OY-axis) then he will consume a very large
quantity of commodity Y while zero quantity of
commodity-X.

This situation has been shown in the diagram.

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6. Perfect Complementary Goods have L-Shaped Indifference Curves

In the case of those complementary goods

which are jointly demanded like bread and
butter, shoes and socks.

It is it the Indifference curves will be L-

shaped as given in diagram:

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7. Indifference Curves are Not Necessarily Parallel to Each Other

As we know that all indifference curve slope

downward to right or they have negative slopes.
But the rate o the slope may not necessarily be
the same as shown in the following diagram:
As we know that all indifference curve slope
downward to right or they have negative slopes.
But the rate o the slope may not necessarily be
the same as shown in the following diagram:

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8. Indifference Curve is Always Convex Towards Point of Origin

A curve that slopes downwards can have three

possible steps:
1.convex towards the origin.
2.concave curve and.
3.straight-line curve.
The shape of the curve is determined by the
rate of substitution between the two
commodities.
The curve will be a convex one if the marginal
rate of substitution diminishes; the concavity
will obtain if the marginal rate of substitution
Rises; and the constant marginal rate of
substitution will give us a straight line curve.
Hence, the Indifference curves are always
convex towards the point of origin.

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 Criticisms and Complications of the
Indifference Curve
• Many components of current economics, like indifference
curves, have been criticised for oversimplifying or making
unreasonable assumptions about human behaviour.
Consumer tastes, for example, might change dramatically
over time, rendering accurate indifference curves useless.
• Others argue that concave indifference curves, as well as
circular curves that are convex or concave to the origin at
specific points, are theoretically possible. Consumer
preferences can change substantially over time, making
accurate indifference curves obsolete.

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 REFERENCE:
❖ Books Referred To For The Presentation Are As Follows:
❖ BECC-131 Principles of Microeconomics-I

❖ Links Referred To Were:

www.googlesir.com/indifference-curve-concept-
properties-features-examples/