Purchase Solution

An indifference curve

Not what you're looking for?

Ask Custom Question

Explain an indifference curve in everyday language. Graphically show and briefly explain how someone would determine their optimal consumption.

Purchase this Solution
Solution Summary

An indifference curve is defined.

Solution Preview

We start by taking an imaginary household and giving it a bundle of goods, say 18 units of clothing and 10 units of food (refer to the table).

Now, offer the household an alternative bundle, say 13 units of clothing and 15 units of food. This alternative combination of goods has 5 fewer units of clothing and 5 more units of food than the first one.

Whether the household prefers this bundle depends on the ...

Purchase this Solution
Free BrainMass Quizzes
Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

View More Free Quizzes
Related BrainMass Solutions

  • an indifference curve

    A higher indifference curve gives a higher utility than a lower indifference curve. Thus, the consumer will be better off at any point on a higher indifference curve. This post describes an indifference curve.

  • Indifference curve and utility theory

    646432 Indifference curve and utility theory Two bundles of oranges and bananas are on the same indifference curve for an individual: (5 oranges, 12 bananas) and (14 oranges, 3 bananas).

  • Indifference Curve Analysis Used on Pension System

    At any point along the indifference curves would be a combination of present consumption and future consumption. Any combination along an indifference curve would give an individual equal level of satisfaction.

  • full indifference curve framework

    102986 full indifference curve framework Given: Good X and Good Y A consumer's relative preferences change for good X.

  • Indifference Curves, Utility Maximizing Conditions, and Demand Curves

    Some basics: All points on a given Indifference Curve (IDC) give the consumer the same level of satisfaction. The higher up we go an IDC map, the higher the utility. IDCs are convex to the origin.

  • Indifference Curves and budget lines

    One indifference curve represents one level of marginal utility. Thus anywhere on the indifference curve you will get the same level of marginal utility. Also more away the indifference curve is from the origin higher is your marginal utility.

  • Marginal Rate of Substitution

    Draw an indifference curve for Tyler through the bundle at (2,2), which is the bundle with two units of each good.

  • Consumer Behavior: Indifference Curve Analysis

    Indifference curve analysis is an approach of theory of consumer behavior.

  • Indifference Curve, Budget Line & Optimal Utility

    It will be tangent to the indifference curve at (1,1) 4. The optimal consumption bundle is where the budget line is tangent to the indifference curve, i.e. at 1 unit each of goods x and y 5.

View More Related Solutions