Explain the characteristics of Indifference curves.

1.	Explain the characteristics of Indifference curves.
Answer» Characteristics of Indifference curve are as follows : 1. Indifference curve slopes downward from left to right ( i.e. it has a negative slope) 2. Higher indifference curve shows higher level of satisfaction and vice-versa. 3. Two indifference curves of the same consumer never cut each other as different ICs show different levels of satisfaction. 4. Indifference curve never touches any of the axis. 5. Indifference curve is convex to the origin because MRS_xy is diminishing. 6. Indifference curves need not to be parallel. Indifference curves of perfect substitutes are parallel. 7. The curvature of the indifference curve shows the degree of substitute and complementary nature between two goods.

Answer»

Characteristics of Indifference curve are as follows :

1. Indifference curve slopes downward from left to right ( i.e. it has a negative slope)

2. Higher indifference curve shows higher level of satisfaction and vice-versa.

3. Two indifference curves of the same consumer never cut each other as different ICs show different levels of satisfaction.

4. Indifference curve never touches any of the axis.

5. Indifference curve is convex to the origin because MRS_xy is diminishing.

6. Indifference curves need not to be parallel. Indifference curves of perfect substitutes are parallel.

7. The curvature of the indifference curve shows the degree of substitute and complementary nature between two goods.

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