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An indifference curve is a locus of all combinations of two goods which yield the same level of satisfaction (utility) to the consumers. Since any combination of the two goods on an indifference curve gives equal level of satisfaction, the consumer is indifferent to any combination he consumes.
Indifference Curve Analysis | Microeconomics. Learning Objectives. Describe the purpose, use, and shape of indifference curves. Explain how one indifference curve differs from another. Explain how to find the consumer equilibrium using indifference curves and a budget constraint.
Indifference curve analysis emphasizes marginal rates of substitution (MRS) and opportunity costs. It typically assumes that all other variables are constant or stable.
Indifference Curve Analysis. The indifference curve analysis work on a simple graph having two-dimensional. Each individual axis indicates a single type of economic goods. If the graph is on the curve or line, then it means that the consumer has no preference for any goods, because all the good has the same level of satisfaction or utility to ...
The highest indifference curve possible for a given budget line is tangent to the line; the indifference curve and budget line have the same slope at that point. The absolute value of the slope of the indifference curve shows the MRS between two goods.
An indifference curve is a graphical representation of various combinations or consumption bundles of two commodities. It provides equivalent satisfaction and utility levels for the consumer. It makes the consumer indifferent to any of the combinations of goods shown as points on the curve.
A simplified explanation of indifference curves and budget lines with examples and diagrams. Illustrating the income and substitution effect, inferior goods and Giffen goods