Indifference Map

We can draw similar indifference curves showing combinations  apples and mangoes which represent greater and lesser satisfaction than That shon Oil indifference curve . In this figure, all points ones and  are preferred to all the points . All combinations of apples and mall-goes UN  arc equally preferred and arc more preferred to all the combinations at various points on the. In other words. indifference curve represents a lower level  satisfaction as compared with indifference curves . It will thus he seen that indifference curves remind  the weather maps showing the lines of equal pressure the contour. A set (If indifference curves is called all indifference.

Let us suppose that the consumer decides upon the fourth combination. which in terms of our diagram (No. 6.1), means that he choose the combination represented by a point .Now the marginal unit of mangoes is the third mango, to acquire which he has had 10 forego two apples; or in other words, he will agree 10 get  fourth mango if he is compensated by two apples. At this point. the marginal rate of substitute less and less of the other since our desire for the former becomes . In technical language. it will he said that the marginal rate of substitution we have more of X and less of Y. This is clearly for Y so as to keep the consumer.

[av_button label='Get Any Economics Assignment Solved for US$ 55' link='manually,' link_target='' color='red' custom_bg='#444444' custom_font='#ffffff' size='large' position='center' icon_select='yes' icon='ue859' font='entypo-fontello']

Share This