ECON 1011 Lecture Notes - Lecture 15: Demand Curve, Indifference Curve
ECON 1011 verified notes
15/30View all
Document Summary
A curve on a graph (the axes of which represent quantities of two commodities) linking those combinations of quantities that the consumer regards as of equal value: reflects an agent"s preferences. If points a, b & c provide the same utility, then the user is indifferent. 1: more is better, cannot cross with one another, slope is negative (downwards) Rule 1: farther from the origin is better. For the same y-value, the higher indifference curves (i2 & i3) would be better as the x-values are larger and they are further from the origin. Note: just because indifference curves cannot cross does not mean that they are parallel. Make sure the curve does not slope upwards at the end (shown in diagram). For y* (qy) and x* (qx), draw an indifference curve at the point (on top of the line because the curve slopes downwards) on the original line (blue line).
