Properties of indifference curves

Indian Economy glossary

Also called: Features of indifference curve · Topic: Consumer Behaviour, Demand and Elasticity · NCERT: Class 12, Ch 2 "Theory of Consumer Behaviour"

Meaning

An indifference curve joins bundles that give the consumer equal satisfaction. When preferences are monotonic (more is better), these curves have three properties:

  1. They slope downward from left to right. To get more of one good and stay equally happy, she must give up some of the other.
  2. A higher curve gives higher utility. It holds bundles with more of at least one good.
  3. Two curves never intersect. If they crossed, one bundle would be both equal to and better than another, which is a contradiction.

They are also usually convex to the origin because of diminishing MRS.

Example

Class 12 Table 2.4: the bundles (1, 10), (2, 10) and (3, 10) have the same mangoes and more bananas each time. So (3, 10) is better than (2, 10), which is better than (1, 10), and each lies on a higher curve. If two curves crossed at point A, then B = A and A = C, so B = C. But B has more mangoes than C, so it must be better. That is impossible.

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