Measurement of National Income
The indifference curve technique also tends itself for measuring national income. National income is the aggregate value of the net output of an economy. Each individual attaches the same relative importance to the commodities as their price ratio. National income is produced by the members of the community aim so also it is consumed by them. An estimate of the relative valuation of the commodities convincing the national income IS es annual fer com using it. In their system of purchases, the con users combine the commodities in such a manner a to illustriousness satisfaction. The relative importance of the commodities in these combinations and the Laurel prices indicate the relative importance of the. e l diagnostics to valorous members of the community. In fact, relative prices furnish the basis for combining the commodities in the purchase plans of the consumers. The indifference curves. showing the different combinations open to a consumer, call thus be used for measuring national.
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