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As quantity consumed of one good (X) increases, total utility (satisfaction) would increase if not offset by a decrease in the quantity consumed of the other good (Y). Satisfaction, or utility must be offset so that at each point on the curve 'indifference' is retained.
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Indifference curve analysis is not much in use because it only tells us that demand curve has a negative slope except when they don't .?
indifference curve analysis is not much in use because it only tells us that demand curve has a negative slope except when they don't ....
What are characteristics of an indifference curve?
indifferent curves are convex to their origin, they do not intersect, and have a negative slope
How do you find the slope of an Indifference curve?
You find the tangent to the curve at the point of interest and then find the slope of the tangent.
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.
Which direction does the demand curve slope?
Is always negative. (should be in all caps for emphasis)
Indifference curve analysis is not much in use because it only tells us that demand curve has a negative slope except when they don't .?
indifference curve analysis is not much in use because it only tells us that demand curve has a negative slope except when they don't ....
What are characteristics of an indifference curve?
indifferent curves are convex to their origin, they do not intersect, and have a negative slope
Slope of indifference curve?
indifference curves slopes downward to the right
How do you find the slope of an Indifference curve?
You find the tangent to the curve at the point of interest and then find the slope of the tangent.
What does the slope of the indifference curve reveal?
marginal rate of substitution
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.
Which direction does the demand curve slope?
Is always negative. (should be in all caps for emphasis)
What is negaitve slope?
You're familiar with the xy-plane. A line with negative slope is one that goes down toward the right. A curve has a negative slope at a point if the tangent line to the curve at that point has a negative slope.
Why does Investment Savings Curve slope downward?
due to negative slope
What are indifference curves explain it using a graph?
o Indifference curves are curves that have a negative slope and are bowed inward. Each point on the line has the same exact util value. In other words, a person would be the same amount of "happy" at each point on the indifference curve. There are an infinite amount of indifference curves on every graph. G2
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.
Supply curve slope downward?
supplycurve is negative slope in decreasing cost industry
