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Is the height of an indifference curve the marginal rate of substitution?
Kugbemeitsumonah
Yes. The height of an indifference curve is the marginal rate of substitution.
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∙ 9y ago
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What are the influence of marginal rate substitution on indifference curve?
the two difference of curve is radios
What is the relationship between indifference curve and budget constraint?
The tangency point of Indifference curve and budget line shows the Marginal Rate of Substitution between X and Y commodities. Consumer's equilibrium is achieved at that point.
Can marginal rate of substitution may increase or decrease in absolute value as one moves southeast along an indifference curve depending upon whether the substitution or income effect is dominant?
Indifference curves are downward sloping (negative slope) - therefore they are flatter towards the south east. the marginal rate of substitution is defined as the amount of good y (along the y axis) that is necessary to substitute for 1 good x (along the x axis) so that the effective bundle (or utility) remains the same. In effect the MRS is the slope of the indifference curve at a particular point. Therefore, MRS decreases as you move southeast along an indifference curve.
Give details that why an Indifference Curve is not concave?
Because of diminishing marginal rate of substitution, which is the principle that the more of one good a consumer has, the more they are willing to give up for an additional unit of the other good. Therefore the indifference curve must get flatter as we go along it
Why indifference curve is convex to origin?
Indifference curve is convex to the origin.This means that the slope of indifference curve decreases as we move the curve from left to right.This can be explained in terms of Marginal rate of substitution of good X for good Y. The marginal rate of substitution is the maximum amount of Y the consumer is willing to give up to get an additional unit of X.This specifies the terms of trade-off between bundles of goods among which the consumer is indifferent. As the consumer moves down the curve he acquires more X and is left with less Y.So the amount of Y he would be willing to give up to get an additional unit of X becomes progressively smaller as is natural. So, the MRSxy diminishes as he moves from left to right.The convexity of the indifference curve illustrate the diminishing rate of substitution of X for Y associated with the movement down the curve from left to right.
What does the slope of the indifference curve reveal?
marginal rate of substitution
What are the influence of marginal rate substitution on indifference curve?
the two difference of curve is radios
What is the relationship between indifference curve and budget constraint?
The tangency point of Indifference curve and budget line shows the Marginal Rate of Substitution between X and Y commodities. Consumer's equilibrium is achieved at that point.
Can marginal rate of substitution may increase or decrease in absolute value as one moves southeast along an indifference curve depending upon whether the substitution or income effect is dominant?
Indifference curves are downward sloping (negative slope) - therefore they are flatter towards the south east. the marginal rate of substitution is defined as the amount of good y (along the y axis) that is necessary to substitute for 1 good x (along the x axis) so that the effective bundle (or utility) remains the same. In effect the MRS is the slope of the indifference curve at a particular point. Therefore, MRS decreases as you move southeast along an indifference curve.
Give details that why an Indifference Curve is not concave?
Because of diminishing marginal rate of substitution, which is the principle that the more of one good a consumer has, the more they are willing to give up for an additional unit of the other good. Therefore the indifference curve must get flatter as we go along it
Why indifference curve is convex to origin?
Indifference curve is convex to the origin.This means that the slope of indifference curve decreases as we move the curve from left to right.This can be explained in terms of Marginal rate of substitution of good X for good Y. The marginal rate of substitution is the maximum amount of Y the consumer is willing to give up to get an additional unit of X.This specifies the terms of trade-off between bundles of goods among which the consumer is indifferent. As the consumer moves down the curve he acquires more X and is left with less Y.So the amount of Y he would be willing to give up to get an additional unit of X becomes progressively smaller as is natural. So, the MRSxy diminishes as he moves from left to right.The convexity of the indifference curve illustrate the diminishing rate of substitution of X for Y associated with the movement down the curve from left to right.
Why does opportunity cost decreases on the Indifference curve?
If our preferences convex, the indifference curve exhibits decreasing marginal rate of substitution. That is, the more you consume of good X, then you are willing to give up less of good Y. Thus, the opportunity cost of exchanging good Y decreases as we get more of good X.
What is the difference between marginal utility and indifference curve?
Marginal utility is the satisfaction a consumer receives from consuming an additional unit of a good The indifference curve shows different combinations of 2 goods that the consumer is indifferent towards
How can the demand curve be derived using the marginal utility theory?
Marginal utility is the key concept underline demand .The height of a demand curve reflects marginal utility.The marginal utility curve resembles the demand curve. So, it is through the marginal utility we get the demand curve.
What happens to the marginal rate of substitution as you move along a convex indifference curve?
The MRS measures how much of a good you are willing to give up in exchange for one more unit of the other good, keeping utility constant. The MRS diminishes along a convex indifference curve in that as you move down along the indifference curve, you are willing to give up less and less of the one good in exchange for the other. The MRS is also the slope of the indifference curve, which increases (becomes less negative) as you move down along the indifference curve. The MRS is constant along a linear indifference curve, since in this case the slope does not change. The consumer is always willing to trade the same number of units of one good in exchange for the other.
What is the different between indifference map and indiffirence curve?
Indifference curve is a curve that shows consumption bundles that give the consumer the same level of satisfaction. Indifference map, on the other hand Indifference curve is a graph of two or more indifference curves.
Features of indifference curve?
two indifference curve never cut each other..
