Indifference map
Topic: Consumer Behaviour, Demand and Elasticity · NCERT: Class 12, Ch 2 "Theory of Consumer Behaviour"
Meaning
An indifference map is a family of indifference curves drawn on one graph. An indifference curve joins all bundles (combinations of two goods) that give the consumer the same satisfaction. The map shows all of a consumer's preferences at once. With monotonic preferences (more is better), any bundle on a higher curve is preferred to any bundle on a lower curve.
Example
Take three curves, IC₁, IC₂ and IC₃, drawn for bananas and mangoes. The bundle (2, 10) on IC₂ is preferred to every bundle on IC₁. Every bundle on IC₃ is preferred to it. The consumer is equally happy with any two points on the same curve.
Don't confuse with
- Indifference curve: a single curve showing one level of satisfaction. The map is the whole set of such curves.
- Budget line: it shows what the consumer can afford. The indifference map shows what she likes. Her best choice comes from putting the two together.
Related concepts
- Ordinal utility analysis
- Indifference curve
- Marginal rate of substitution
- Law of diminishing marginal rate of substitution
- Convexity of indifference curve
- Perfect substitutes
- Monotonic preferences
- Properties of indifference curves
- Utility function
- Revealed preference