Question
Why a higher Indifference Curve in an indifference map Prepresents a higher level of satisfaction?
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Answer
A higher Indifference Curve represents higher level of satisfaction by offering a bundle of goods containing greater units of atleast one good with no less units of the other good. And being a rational consumer, person would prefer to have greater units than lesser.
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Does a change in consumer's taste lead to a movement along the demand curve or a shift in the demand curve? Does a change in price lead to a movement along the demand curve or a shift in the demand curve?
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The table give points on an indifference curve for a consumer. Sketch the indifference curve.
|
Combination
|
Good X
|
Good Y
|
|
A
|
1
|
15
|
|
B
|
2
|
11
|
|
C
|
3
|
8
|
|
D
|
4
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6
|
|
E
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5
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5
|
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| Output (Units) |
Total Revenue (Rs.) |
Marginal Revenue (Rs.) |
Average Revenue (Rs.) |
| 1 | - | - | 8 |
| 2 | - | 4 | - |
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Normal good and Inferior good.