Two indifference curves cannot intersect Rating:
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Indifference curves are graphical representations of the different combinations of goods or services that would give a consumer equal levels of satisfaction. In other words, an indifference curve shows the different bundles of goods or services that a consumer is willing to accept in exchange for giving up a particular good or service.
One of the key characteristics of indifference curves is that they cannot intersect. This is because if two indifference curves intersect, it would mean that a consumer is willing to accept two different combinations of goods or services that give them the same level of satisfaction. This is not possible, as it violates the basic principle of consumer behavior, which is that a consumer will always choose the combination of goods or services that gives them the highest level of satisfaction.
There are a few reasons why indifference curves cannot intersect. First, if two indifference curves intersect, it would create a contradiction in the consumer's preferences. For example, if a consumer has two indifference curves that intersect, it would mean that they are willing to accept both combination A and combination B in exchange for a particular good or service. However, this would mean that the consumer is indifferent between combination A and combination B, which is not possible. A consumer will always prefer one combination over another, as they will always choose the combination that gives them the highest level of satisfaction.
Second, if two indifference curves intersect, it would violate the principle of diminishing marginal utility. The principle of diminishing marginal utility states that as a consumer consumes more of a particular good or service, the marginal utility (or the additional satisfaction) they receive from consuming each additional unit of that good or service decreases. This means that a consumer will always prefer a combination of goods or services that gives them a higher level of total satisfaction, rather than a combination that gives them the same level of total satisfaction. Therefore, if two indifference curves intersect, it would mean that the consumer is willing to accept two different combinations of goods or services that give them the same level of total satisfaction, which is not possible.
In conclusion, two indifference curves cannot intersect because it would create a contradiction in the consumer's preferences and violate the principle of diminishing marginal utility. Indifference curves are a useful tool for understanding consumer behavior, but it is important to remember that they have certain limitations and characteristics that must be taken into account when analyzing consumer decision-making.
(i) "two indifference curves cannot touch or intersect each other". explain why
In our example, the consumer yields 250 utils. If combination F is equal to combination B in terms of satisfaction and combination E is equal to combination B in satisfaction. Similarly, if an indifference curve I touch the f-axis at L, the consumer will have only OL of Y good and no amount of X. Find important definitions, questions, meanings, examples, exercises and tests below for Indifference curves never intersect each other due to:a Different levels of satisfactionb Same levels of satisfactionc Convex to origind Concave to originCorrect answer is option 'A'. If an indifference curve ran from a to x, then bundle x would be no better than bundle a despite containing more of both goods. A curve that shows the combinations of consumption bundles that give the consumer the same utility. Why do consumers prefer higher indifference curves? This conclusion looks quite funny because combination F on IC2 contains more of good Y wheat than combination which gives more satisfaction to the consumer.
What are the three properties of indifference curves for two goods? Now imagine a point at which they cross. . The MRS is the rate at which the consumer is willing to give up one good for another. What is the tangency condition between the indifference curve and budget line? The green data point will also have the same utility as the place where the indifference curves intersect. Can you explain this answer? However, on an individual level, a particular good can be a normal good to one person but an inferior or luxury good to another. Therefore, indifference curves can never intersect or touch each other. If combination F is equal to combination B in terms of satisfaction and combination E is equal to combination B in satisfaction.
How is the indifference curve look like for bad goods?
What causes a shift in indifference curve? Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free. It is because at the point of tangency, the higher curve will give as much as of the two commodities as is given by the lower indifference curve. The indifference curves cannot be thick because if they are thick, they would be violating the non-satiation assumption. If two goods X and Y are perfect substitutes, the indifference curve is a straight line with negative slope, as shown in Figure 41 because the MRSXY is constant. Solution By Examveda Team Indifference curves are convex to the origin because two goods are imperfect substitutes. Which assumption would be violated if indifference curves were to cross? If the consumer values apples, for example, the consumer will be slower to give them up for oranges, and the slope will reflect this rate of substitution.
Indifference curves never intersect each other due to:a)Different levels of satisfactionb)Same levels of satisfactionc)Convex to origind)Concave to originCorrect answer is option 'A'. Can you explain this answer?
We would obviously have a point, let's call it A, where this does not hold true. This violates the laws of indifference curve. Intersection of two indifference curves representing different levels of satisfaction is a logical contradiction. Can you explain this answer? Show that for a two-good economy, both goods can- not be luxuries. All points along a single indifference curve provide the same level of utility. So being that they are different curves, we expect them to have different utilities. What happens when MRS is less than PX PY? An indifference curve shows a combination of two goods that give a consumer equal satisfaction and utility thereby making the consumer indifferent.
Why two indifference curves can never intersect each other?
Can two indifference curve have the same utility? To make it even more visual, imagine the outside of a hat - that is somewhat the general format that a usual Utility function type, the Cobb-Douglas one, will end up graphing for you. If the marginal rate of substitution is increasing, the indifference curve will be concave, which means that a consumer would consume more of X for the increased consumption of Y and vice versa, but this is not common. Can indifference curves for two goods intersect each other explain why or why not? If it touches X-axis, as I 2 in Figure 6 at U, the consumer will be having OM quantity of good X and none of Y. Solutions for Indifference curves never intersect each other due to:a Different levels of satisfactionb Same levels of satisfactionc Convex to origind Concave to originCorrect answer is option 'A'. When two goods are perfectly complementary IC is? Consider points 'B' and 'A' on IC1. Can you explain this answer? Can you explain this answer?.
This means that the satisfaction utility of the consumer at point B and F for IC 2 is equal to the satisfaction utility offered by combination of goods at point B and S for IC 1. The slope of the budget line is the relative price of good A in terms of good B, equal to the price of good A as a ratio of the market price of good B. An indifference curve for perfect substitutes will be linear because the marginal rate of substitution between two substitutes is constant. Consumer is indifferent between these points, as both lie on the same indifference curve IC. Now, by the assumption of transitivity, points 'B' and 'C' yield same level of satisfaction to the consumer.
Can you explain this answer? What happens if indifference curves intersect each other? What is an L shaped indifference curve? This creates on obvious problem. Thus, when we talk about utility curves we're dealing with a 3D graphic. How can we distinguish goods from bad in economics? How do you interpret an indifference curve? Besides giving the explanation of Indifference curves never intersect each other due to:a Different levels of satisfactionb Same levels of satisfactionc Convex to origind Concave to originCorrect answer is option 'A'. Therefore, two indifference curves cannot intersect each other. An indifference curve is drawn on a budget constraint diagram that shows the tradeoffs between two goods.
Therefore, indifference curves can never intersect or touch each other. What happens when two goods are complements? Because two combinations having different utility levels cannot be on same indifference curve, it cannot be thick. Where do the indifference and leisure time curves intersect? Because if they intersected, they would not be "indiffernece" curves. The combinations represented by points B and F given equal satisfaction to the consumer because both lie on the same indifference curve IC2. Along the curve, the consumer has an equal preference for the combinations of goods shown—i.
We determine whether goods are complements or substitutes based on cross price elasticity — if the cross price elasticity is positive the goods are substitutes, and if the cross price elasticity are negative the goods are complements. Similarly the combinations shows by points B and E on indifference curve IC1 give equal satisfaction top the consumer. What are the characteristics of indifference curve? How is the indifference curve look like for bad goods? Can you explain this answer? It would mean that indifference curves representing different levels of satisfaction are showing the same level of satisfaction at the point of intersection or contact. The tangency condition between the indifference curve and the budget line indicates the optimal consumption bundle when indifference curves exhibit typical convexity. We can prove this property of indifference curves through contradiction. What are bads examples? When indifference curve is L shaped then two goods will be? This conclusion looks quite funny because combination F on IC2 contains more of good Y wheat than combination which gives more satisfaction to the consumer.
For example, air pollution, traffic congestion, passive smoking etc. An indifference curve is therefore a negatively sloped curve that is a function of a combination of two commodities. Indifference curves cannot intersect each other as it would break down the indifference curve analysis. Also, we can see them in graphic terms. We, therefore, conclude that indifference curves cannot cut each other. It means only one indifference curve will pass through a given point on an indifference map. Consider points 'B' and 'A' on IC1.
