Advertisements
Advertisements
Questions
Explain why an indifference curve is downward sloping from left to right.
Explain why is an indifference curve is Downward-sloping
Why does the indifference curve slope downward?
Advertisements
Solution 1
The indifference curves slope downwards because an increase in the amount of Good 1 along the indifference curve is associated with a decrease in the amount of Good 2, as the preferences are monotonic.
Solution 2
An indifference curve has a negative slope, meaning it slopes downward from left to right. This feature is predicated on the idea that a consumer will only experience the same degree of satisfaction from various combinations of the two commodities if he eats more of one (food) and less of the other (clothing). The presumption of non-satiety leads to this. For instance, the Figure shows that in order to achieve the same degree of happiness from both combinations, a consumer who moves from combination 'A' to combination 'B' on the provided indifference curve (IC) eats one more unit of food but three less units of clothes. An indifference curve must therefore have a negative slope. The consumer will, however, prefer the new combination over the original one if the amount of food is raised but the number of clothing stays the same because the new combination will be more useful to him. As a result, the indifference curves of these two combinations will not intersect.
