Friday, May 29, 2009

Micro-economics, Indifference Curve, Properties of Indifference Curve:4: Higher IC, higher is the level of satisfaction.

4: Higher IC, higher is the level of satisfaction:
The fourth property of indifference curve is that the lower indifference curve provides lower satisfaction. While higher indifference curve provides higher satisfaction. This property is explained with the help of the following diagram:
In this figure x-axis is used for mangoes and y-axis is used for apples Ic, Ic2, Ic3 and Ic4 are four indifference curves, each provides different level of satisfaction. The curve Ic4 is higher than the curve Ic3 which is higher than Ic2. where as Ic2 curve is higher than Ic1.Thus,

Ic4 > Ic3 > Ic2 > Ic1.

No comments:

Post a Comment