1. Negatively sloped: Indifference curves slope downwards from left to right implying that
more of one commodity is consumed by reducing the consumption of the other commodity
while deriving the same level of satisfaction, that is, marginal rate of substitution (MRS).
2. Do not intersect: Indifference curves do not intersect because an intersection would contradict the
principles of consistency and transitivity. Intersection implies that different levels of satisfaction can
be derived on the same indifference curve (which is not in accordance with the definition of
indifference curves). The intersection point would also mean that two indifference curves have the
same level of utility which is also not true.
Similarly, intersection would mean that the consumer is indifferent between points A, B and C assuming that
A = C, B = C and therefore A = B. However, this is NOT the case since point B is on a higher indifference
curve representing more units of X (i.e. X2) than point A (i.e. X1) meaning that a rational consumer would
prefer more than less thereby choosing to consume at B than at A (preferring point B to point A). This then
contradicts the principles of transitivity and consistency which state that if A = C and B = C then A = B
because in this case A? B.
3. Convex to the origin: Indifference curves are convex to the origin denoting diminishing marginal rate of
substitution of one commodity for another since commodities are close but not perfect substitutes such
that as more of one commodity is consumed it becomes increasingly difficult to give up more units of
the other while deriving the same level of satisfaction. Marginal rate of substitution is the amount of one
commodity that the consumer is just willing and able to give up for an additional unit of another
commodity while deriving the same level of satisfaction.
4. Indifference map:- the distance from the origin of indifference curves represents different levels of
satisfaction; those further away from the origin represent higher levels of satisfaction.
Wilfykil answered the question on
February 6, 2019 at 07:01