The document presents key concepts of indifference curves and their assumptions related to consumer behavior, including rationality, utility, and the diminishing marginal rate of substitution. It highlights properties such as the negative slope, convexity, and the inability of curves to intersect. Additionally, it explains the consumer equilibrium condition at the tangency between the indifference curve and the budget line.

1. A PRESENTATION ON –
INDIFFERENCE CURVE

2. Assumptions
 Rational behavior of the consumer
 Utility is ordinal
 Diminishing marginal rate of substitution
 Consistency in choice
 Transitivity in choice making
 Goods consumed are substitutable

3. Definition :
A curve that shows combinations of
goods which gives the same level of
satisfaction to the consumers so that
an individual is indifferent.

5. Properties of indifference curves :
• Indifference curves are negatively sloped
If the quantity of one good increases then the quantity
of other goods must be decreased.
• Indifference curves are convex to the origin
Convexity illustrates the law of diminishing marginal
marginal rate of substitution.
• Indifference curves can never intersect each other
• If two indifferent curve intersects then the point of
intersection would be represent two different level
of satisfaction.

6. Consumer Equilibrium
At the point of tangency, the slopes of
indifference curve and budget line
equal
Y/ X = Px/Py

7. Budget Line- It shows all the
possible combinations of two
goods that can be purchased
with given level of income.