Peter Kasongi
Dec 21, 2023
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Dec 21, 2023
1. Indifference curves are downward sloping: This means that as the quantity of one good increases, the quantity of the other good must decrease in order to keep the consumer equally satisfied. This reflects the concept of diminishing marginal rate of substitution.
2. Indifference curves do not intersect: Indifference curves cannot intersect because each curve represents a different level of satisfaction. If two curves were to intersect, it would imply that the consumer is equally satisfied at two different levels, which is not possible.
3. Indifference curves are convex to the origin: This convex shape reflects the concept of diminishing marginal rate of substitution. As the consumer consumes more of one good, the marginal rate of substitution decreases, indicating that they are willing to give up less of the other good to obtain additional units of the first good.
4. Higher indifference curves represent higher levels of satisfaction: Indifference curves that are further away from the origin represent higher levels of satisfaction for the consumer. This is because the consumer can consume more of both goods while remaining equally satisfied.
5. Indifference curves cannot touch the axes: Indifference curves cannot touch the axes because it would imply that the consumer is consuming zero units of one of the goods, which contradicts the assumption that the consumer wants to consume some positive quantity of both goods.
6. Indifference curves are subjective: Indifference curves are specific to each individual consumer and reflect their personal preferences and tastes. Different consumers may have different shapes and positions of their indifference curves based on their preferences.
2. Indifference curves do not intersect: Indifference curves cannot intersect because each curve represents a different level of satisfaction. If two curves were to intersect, it would imply that the consumer is equally satisfied at two different levels, which is not possible.
3. Indifference curves are convex to the origin: This convex shape reflects the concept of diminishing marginal rate of substitution. As the consumer consumes more of one good, the marginal rate of substitution decreases, indicating that they are willing to give up less of the other good to obtain additional units of the first good.
4. Higher indifference curves represent higher levels of satisfaction: Indifference curves that are further away from the origin represent higher levels of satisfaction for the consumer. This is because the consumer can consume more of both goods while remaining equally satisfied.
5. Indifference curves cannot touch the axes: Indifference curves cannot touch the axes because it would imply that the consumer is consuming zero units of one of the goods, which contradicts the assumption that the consumer wants to consume some positive quantity of both goods.
6. Indifference curves are subjective: Indifference curves are specific to each individual consumer and reflect their personal preferences and tastes. Different consumers may have different shapes and positions of their indifference curves based on their preferences.
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