Do indifference curve meet

Answer 1

Indifference curves are the graphical representation of the preferences of an individual. In microeconomics there are three assumptions about preferences in order for them to make sense in terms of the graphical representation through indifference curves. One assumption is the notion of completeless. This means that there is no ambiguity between what the individual prefers. The individual prefers one over the other or the individual does not care which one he gets. Another assumption is that preferences are consistent. For example if an individual prefers good A to good B and good B over good C. Then the individual prefers good A to good C. The last assumption is that an individual will always prefer more goods than less of a good. An indifference curve depicts all the combinations of goods that provide the individual the same amount of satisfaction. If two indifference curves intersect, this violates the last assumption of individual preferences that more is preferred over less of a good. In this case the individual is indifferent to less when the individual can have more. The problem with this violating these assumptions is that they are the basis of utility or profit maximization. If a firm or individual prefers less than the tools of utility or profit maximization will not make accurate predictions.