What does an indifference map show?

What does an indifference map show?

An Indifference Map is the graphical representation of two or more indifference curves showing the several combinations of different quantities of commodities, which consumer consumes, given his income and the market price of goods and services.

What is the value of an indifference curve to the Economist?

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 are the three 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.

What does indifference curve represent?

Definition: An indifference curve is a graph showing combination of two goods that give the consumer equal satisfaction and utility. Each point on an indifference curve indicates that a consumer is indifferent between the two and all points give him the same utility.

What do you mean by indifference map in economics?

Definition: The Indifference Map is the graphical representation of two or more indifference curves showing the several combinations of different quantities of commodities, which consumer consumes, given his income and the market price of goods and services.

What is indifference curve graphically explain the properties of an indifference curve?

Why does a higher indifference curve represents higher level of satisfaction?

The higher indifference curve shows higher level of satisfaction as it provides higher quantities of the commodities which a consumer wishes to consume. Two indifference curves can never intersect each other as one specific bundle of commodity can never lie on two curves. So it tends to give contradictory results.

What does the slope of an indifference curve represent?

The slope of the indifference curve is the marginal rate of substitution (MRS). The MRS is the amount of a good that a consumer is willing to give up for a unit of another good, without any change in utility.

How do you know where to draw an indifference curve?

That means that when constructing an indifference curve map, one must place one good on the X-axis and one on the Y-axis, with the curve representing indifference for the consumer wherein any points that fall above this curve would be optimal while those below would be inferior and the entire graph exists within the …

What is indifference curve explain three features of indifference curve?

There are four important properties of indifference curves that describe most of them: (1) They are downward sloping, (2) higher indifference curves are preferred to lower ones, (3) they cannot intersect, and (4) indifference curves are convex (i.e. bowed inward).

What is indifference curve write any three 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.

Which is the best description of an indifference map?

Indifference Map. An Indifference Map is a set of Indifference Curves. It depicts the complete picture of a consumer’s preferences. The following diagram showing an indifference map consisting of three curves: We know that a consumer is indifferent among the combinations lying on the same indifference curve.

What kind of diagram is an indifference curve?

An Indifference Map is a set of Indifference Curves. It depicts the complete picture of a consumer’s preferences. The following diagram showing an indifference map consisting of three curves:

Is there more than one indifference curve for consumer choice?

Recall that there can be more than one indifference curve for bundles of goods A and B. The goal for solving the consumer choice problem is to get on the highest indifference curve – the curve that is the farthest to the upper right – while also satisfying the budget constraint.

How many indifference curves are there in figure 7.11?

Although only three indifference curves are shown in Figure 7.11 “Indifference Curves”, in principle an infinite number could be drawn. The collection of indifference curves for a consumer constitutes a kind of map illustrating a consumer’s preferences. Different consumers will have different maps.