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प्रश्न
Define an indifference curve.
What is Indifference Curve?
उत्तर १
An indifference map refers to a set of indifference curves which represent consumer preferences over all the bundles of two goods. An indifference curve shows all the combinations which create the same level of satisfaction. We can present an indifference curve with the high or low level of satisfaction, i.e. to the right and above another show a higher level of satisfaction to the consumer. Here, IC3 shows the higher level of satisfaction than IC2. Thus, the indifference curve also relates to a higher level of income of the consumer. However, all these curves have the same level of satisfaction.
उत्तर २
An indifference curve shows all the combinations which create the same level of satisfaction. We can present an indifference curve with the high or low level of satisfaction, i.e. to the right and above another show a higher level of satisfaction to the consumer. Here, IC3 shows the higher level of satisfaction than IC2.
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संबंधित प्रश्न
Explain the conditions of consumer’s equilibrium using indifference curve analysis.
Explain the three properties of the indifference curves.
Explain why an indifference curve is downward sloping from left to right.
Why is an indifference curve negatively sloped? Explain.
If Marginal Rate of Substitution is constant throughout, the Indifference curve will be :(choose the correct alternative)
a. Parallel to the x-axis.
b. Downward sloping concave.
c. Downward sloping convex.
d. Downward sloping straight line.
If Marginal Rate of Substitution is increasing throughout, the Indifference Curve will be: (Choose the correct alternative)
a. Downward sloping convex
b. Downward sloping concave
c. Downward sloping straight line
d. Upward sloping convex
Define indifference map.
A consumer consumes only two goods. If the price of one of the goods falls, the indifference curve: (Choose the correct alternative)
a. Shifts upwards
b. Shifts downwards
c. Can shift both upwards or downwards
d. Does not shift
Explain why is an indifference curve is Convex.
Define an indifference map. Why does indifference curve to the right show more utility? Explain.
What are the properties of indifference curves?
Identify the correct pair of items from the following Columns I and II:
| Columns I | Columns II |
| (1) Demand Curve | (a) Downward sloping |
| (2) Indifference curve | (b) Upward rising |
| (3) Marginal Utility Curve | (c) L shaped curve |
| (4) Total Utility Curve | (d) Y shaped curve |
Read the following passage and answer the question that follows:
| The ordinal list revolution originates in the criticism of the psychological foundations of the theory of demand, namely, the principle of decreasing marginal utility as Alfred Marshall ([1890] 1898) used it. The rejection of hedonist hypotheses led Irving Fisher (1892) and Pareto (1896-97, 1900, 1909) to favour an objective or "positive" approach to economic concepts. The "ordinal list revolution" (Omarzabal 1995, 116) is grounded in a methodological transformation of economics that put the facts of objective experience as a foundation of economics and provided a research program for the ensuing years (Green and Moss 1993; Lewin 1996). Mathematically, ordinalism is entirely based upon the idea that one can dispense with the use of a specific utility function and that no meaning shall be attached to utility measurement, except as an ordinal principle. Clearly, the development of ordinalism must be separated from the introduction of the concept of the indifference curve. Ordinalism was first advocated in Fisher's "Mathematics Investigations" (1892) and Pareto's Sunto (1900) and Manual ([1909] 1971), while the indifference curve had appeared in F. Y. Edge Worth's Mathematical Psychics (1881). It was thus only through Fisher's and Pareto's recasting that the concept of the indifference curve became irreversibly associated with the promotion of ordinalism. Along the way, the recasting of the theory of choice along ordinal list lines raised a number of issues (about integrability, measurability, and complementarity) that would be progressively settled. The reasonable closing date for the ordinalist revolution is 1950, after Houthakker's (1950) and Samuelson's (1950) contributions. From the late 1920s, the Paretian school was progressively gaining a larger audience while the use of the concept of marginal utility and other derivative concepts was challenged. Consequently, demand theory was recast along with the principles of individual preferences and ordinal utility functions. Nevertheless, English authors proved very silent about the meaning of indifference curves. Most if not all of the reflections after 1920 about the nature of indifference curves took place in America, mainly under the impulse of Henry Schultz at Chicago. This is an American story. |
How is utility measured in Ordinal utility theory?
Assertion (A): A lower indifference curve represents a higher level of satisfaction.
Reason (R): According to the Indifference Curve Approach, utility is an ordinal concept, that is, it can be ranked and not measured.
Which of these is not a property of indifference curve?
Which of the following statements are incorrect?
Points K and T will NOT be attained by the consumer. Select the reason from the options given below.
Will you defend or refute the case depicted in the following diagram? Provide a rationale in support of your view.
