Question

What’s the indifference curve? Can an indifference curve cross? Utility and indifference curve is used to...

What’s the indifference curve?

Can an indifference curve cross?

Utility and indifference curve is used to derive what law?

Homework Answers

Answer #1
  • Indifference curve shows different combinations of two goods that can give an individual equal amount of satisfaction. Each point on the curve shows that the customer is indifferent between the goods he chose and is satisfied.
  • No, the indifferent curves cannot cross. This is because, the higher indifference curve gives the customers higher satisfaction.
  • Utility and indifference curve is used to derive the law of diminishing marginal utility. The law states that the marginal utility of a commodity will decrease if an addition unit of that commodity is consumed. That is why the indifference curve is generally convex to the origin.
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