it consists of concept, features and schedule and curve of Indifference Curve

1. INDIFFERENCE
CURVE PRESENTED BY:-
DR. JYOTI KHARE
ASSOCIATE PROFESSOR
GOVT. P. G. COLLEGE
MALDEVTA, (RAIPUR)
DEHRADUN

2. Indifference Curve
 New analysis/Substitution analysis
 Preference approach to consumer behaviour
 U is inherent and subjective
 Associated with the name of J. R. Hicks and
R.J.D Allen
 Content with the fact of the consumer’s
Preferences.

3. ASSUMPTIONS…….
 Consumer is not interested in one commodity at a particular time
 The consumer while spending money on goods act in a rational income
 (2) There are two goods X and Y.
 (3) The consumer possesses complete information about the prices of the goods in the
market.
 4) The prices of the two goods are given.
 (5) The consumer’s tastes, habits and income remain the same throughout the analysis.
 (6) He prefers more of X to less of У or more of Y to less of X.
 (7) An indifference curve is negatively inclined sloping downward.

4. Schedule

5. PROPERTIES OF INDIEERENCE CURVE
 Indifference curve slopes downward from left to right.
 Indifference curve are convex to origin.
 Two Indifference curve can not touch or intersect
each other.
 Higher Indifference curve represents higher level of
satisfaction.
 Indifference curve need not to be parallel to each
other. ( Due to Ordinal, marginal rate of 2 comd. Not
same, IC – no width)

6. Indifference Map
(Collection of indifference curves and represents a higher level of satisfaction)
 The Indifference Map is the graphical representation of two or more indifference
curves showing the several combinations of different quantities of commodities,
which consumer consumes, given his income and the market price of goods and
services

7. Budget line
 A budget line shows the combinations of two products that a consumer can afford to buy
with a given income – using all of their available budget.
 Let us understand the concept of Budget line with the help of an example: Suppose, a
consumer has an income of 2000. He wants to spend it on two commodities: X and Y,
where each is priced at 1000. Now, the consumer has three options to spend all of his
income: 1. Buy 2 units of X,
 2. Buy 2 units of Y,
 or 3. ONE UNIT OF BOTH

8. BUDGET LINE
 Budget line should be tangent to the indifference curve
 Consumer's equilibrium is based on the assumption that the income of a consumer is
constant and that he spends his entire income on purchasing two goods whose prices are
given. Budget line should be tangent to the indifference curve

9. THANK YOU