of the Indifference Curves
curves are subjective and unique to each person. Nevertheless they have in
common the following properties:
indifference curve has a negative slope, which denotes that if the quantity of
commodity (y) decreases, the quantity of the other (x) must increase, if the
consumer is to stay on the same level of satisfaction. (a necessary consequence
of the non satiety postulate).
curves that do not have negative slopes such as those shown in diagram 2.17 cannot
be indifference curves, in all three cases combination B is clearly preferable
to combination A.
curves are not only negatively sloped, but are also convex to the origin. The
convexity of the indifference curves implies that not only the two commodities
are substitutes for each other but also the fact that the marginal rate of
substitution (MRS) between the goods decreases as a consumer moves along an
is lower indifference curve denoting lesser satisfaction. Combination C and B
fall on IC1.
is upper indifference curve denoting higher satisfaction. C and A combinations
are on IC2.
point of intersection, C=B on IC1 and C=A on IC2. So A=B
whereas, A is in upper IC and B is on lower IC. This is not possible.
touch the axis, it violates the basic assumption that the consumer purchases
two commodities in a combination. Purchasing only one commodity means monomania
that is consumers’ lack of interest in the other commodity or his insistence on
purchasing only one commodity.