Properties of Indifference Curves
- An indifference curve is usually convex to the origin.
- Indifference curves slope downwards from left to right.
- A set of indifference curves with each successive curve lying outside the previous one in a North East direction is called an indifference map.
- The curves do not cross as this would isolate the axiom of transitivity of preferences.
- Each curve is a graphical representation of a utility function expressed as:
U = f (x,y)
Where: u is a predetermined level of utility.
x and y are two commodities to be consumed in combination to guide u.
The slope of the indifference curve gives the rate at which a consumer is willing to exchange one unit of a product for units of another. This is called the marginal rate of substitution.