Answer: Linear indifference curves are indifference curves that have a similar slope every- in which — i.e. indifference curves with fixed rather than diminishing MRS. Thus, the MRS cannot depend on x1 or x2 for the indifference curve to be linear — that’s the case just for uB (x1,x2).
Answer and Explanation: Yes, an indifference curve can be concave. The concave form of the indifference curve is an exception to the residences of the indifference curve.
Also Know, what’s the change among indifference curve and indifference map? Indifference Map. It refers to a collection of indifference curves reminiscent of different income levels of the consumer. In an indifference map, indifference curves are parallel and a better indifference curve represents an improved level of satisfaction.
Preserving this in view, how do you examine the form of an indifference curve?
Shape of an Indifference Curve Indifference curves have a roughly comparable shape in two ways: 1) they’re downward sloping from left to right; 2) they are convex with admire to the origin. In different words, they are steeper on the left and flatter at the right.
Are indifference curves always downward sloping?
The indifference curves ought to slope down from left to right. Which means an indifference curve is negatively sloped. It slopes downward because as the buyer increases the consumption of X commodity, he has to stop certain items of Y commodity so as to maintain a similar level of satisfaction.
What are the assumptions of indifference curve?
Assumptions of Indifference Curve Analysis: (1) The buyer acts rationally so as to maximise satisfaction. (2) There are two items X and Y. (3) The consumer possesses complete information about the costs of the products in the market.
Can indifference curves be horizontal?
An indifference curve represents several combos of two commodities. This violates the essential definition of an indifference curve. Hence, an indifference curve does now not contact either horizontal axis or vertical axis. Indifference curves need not be parallel.
What is a convex indifference curve?
Convexity of indifference curves signifies that the marginal rate of substitution of X for Y falls as extra of X is substituted for Y. Thus, indifference curves are convex to the foundation whilst principle of diminishing marginal cost of substitution holds good and which is usually the case.
Is indifference curve concave to the origin?
To preserve the same level of utility, an increase in one good (which reduces utility) need to be matched with the aid of a discount within the other good (which could enhance utility). Therefore, the indifference curve is concave to the origin.
What are the makes use of of indifference curve?
The indifferent curve research is used in measuring the cost of living or standard of living in terms of index numbers. We come to understand with the aid of index numbers no matter if the buyer is better off or worse off by using evaluating two time durations while the revenue of the patron and costs of 2 items change.
What often is the shape of indifference curve while two goods are ideal substitutes?
The shape of an indifference curve is convex to the beginning and it is in keeping with the principle of diminishing marginal expense of substitution. If two items X and Y are ideal substitutes, the indifference curve is a straight line with detrimental slope, as shown in Figure 41 since the MRSXY is constant.
What is indifference curve example?
Two commodities are ideal substitutes for each different – During this case, the indifference curve is a directly line, in which MRS is constant. Two goods are perfect complementary goods – An instance of such items would be gasoline and water in a car. In such cases, the IC will be L-shaped and convex to the origin.
Why is indifference curve L shaped?
An indifference curve is the curve at each point of which the application would remain same. The indifference curve of perfect complementary goods is ‘L’ shaped. It is because the software of Left shoe would be zero without a Correct shoe and vice versa.
Why cannot indifference curves cross?
The indifference curves can’t intersect every other. It is because on the point of tangency, the higher curve will give as much as of the two commodities as is given by using the decrease indifference curve. Further the combos indicates through aspects B and E on indifference curve IC1 deliver equivalent delight top the consumer.
Why is an indifference curve convex to the origin?
Indifference curves are convex to the foundation due to the fact as the consumer begins to extend his or her use of one good over another, the curve represents the marginal cost of substitution. The marginal expense of substitution goes down as the consumer offers up one well for another, so it’s convex to the origin.