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An example of how indifference curves are obtained as the level curves of a utility function. A graph of indifference curves for several utility levels of an individual consumer is called an indifference map. Points yielding different utility levels are each associated with distinct indifference curves and these indifference curves on the ...
An indifference graph, formed from a set of points on the real line by connecting pairs of points whose distance is at most one. In graph theory, a branch of mathematics, an indifference graph is an undirected graph constructed by assigning a real number to each vertex and connecting two vertices by an edge when their numbers are within one unit of each other. [1]
For example, if a consumer likes texting, but is neutral about the data package on his phone contract, then increasing the data allowance does not alter his utility. An indifference curve—constructed with data allowance on the Y axis and text allowance is on the X axis forms a vertical line. [2]
English: Illustrates three of infinitely many indifference curves, to illustrate that the household ought to choose that curve (I2) which is tangent to the household's budget line, and then to consume at the point of tangency for maximum utility.
The indifference curves are L-shaped and their corners are determined by the weights. E.g., for the function min ( x 1 / 2 , x 2 / 3 ) {\displaystyle \min(x_{1}/2,x_{2}/3)} , the corners of the indifferent curves are at ( 2 t , 3 t ) {\displaystyle (2t,3t)} where t ∈ [ 0 , ∞ ) {\displaystyle t\in [0,\infty )} .
An example indifference curve is shown below: Each indifference curve is a set of points, each representing a combination of quantities of two goods or services, all of which combinations the consumer is equally satisfied with. The further a curve is from the origin, the greater is the level of utility.
Whether indifference curves are primitive or derivable from utility functions; and; Whether indifference curves are convex. Assumptions are also made of a more technical nature, e.g. non-reversibility, saturation, etc. The pursuit of rigour is not always conducive to intelligibility. In this article indifference curves will be treated as primitive.
Figure 4: Comparison of indifference curves of perfect and imperfect substitutes. Imperfect substitutes, also known as close substitutes, have a lesser level of substitutability, and therefore exhibit variable marginal rates of substitution along the consumer indifference curve. The consumption points on the curve offer the same level of ...
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