Question

Indifference curve ,properties,assumption,marginal rate of substitution,consumer equilibrium with the help of indifference curve ,ciritism on

Answer 1

$\huge\red{Indifference\:curve}$

→ It is the graphical representation of indifference set . Showing combination of two goods which provides equal level of satisfaction to the consumer at every point of Curve.

$\huge{Properties}$

1→ IC slopes downward.

2→ IC is convex to the origin.

3→ Higher IC show higher level of satisfaction.

4→ ICs never cross or intersect .

5→ IC never touches x or y axis .

$\huge{Assumption}$

1→ Money income of consumer is given.

2→ The consumer spends his income on two goods which can be substituted for each other.

3→ Consumer's preference for two goods is well defined.

4→ More of goods will give more of satisfaction. This is known as Monotonic preference.

5→ The consumer is rational.

$\huge{MRS}$

Marginal rate of substitution ( MRS ) refers to the rate at which the consumer is willing to substitute one good for other.

$\huge{Consumer\:equilibrium}$

The consumer's equilibrium refers to the optimum choice of the consumer.

He strikes equilibrium point when :-

1 → MRS xy = $\frac{Px}{Py}$

2 → IC is convex at the point of equilibrium.

Hope it helps

Answer 2

Answer:

ndifferencecurve

→ It is the graphical representation of indifference set . Showing combination of two goods which provides equal level of satisfaction to the consumer at every point of Curve.

\huge{Properties}Properties

1→ IC slopes downward.

2→ IC is convex to the origin.

3→ Higher IC show higher level of satisfaction.

4→ ICs never cross or intersect .

5→ IC never touches x or y axis .

\huge{Assumption}Assumption

1→ Money income of consumer is given.

2→ The consumer spends his income on two goods which can be substituted for each other.

3→ Consumer's preference for two goods is well defined.

4→ More of goods will give more of satisfaction. This is known as Monotonic preference.

5→ The consumer is rational.

\huge{MRS}MRS

Marginal rate of substitution ( MRS ) refers to the rate at which the consumer is willing to substitute one good for other.

\huge{Consumer\:equilibrium}Consumerequilibrium

The consumer's equilibrium refers to the optimum choice of the consumer.

He strikes equilibrium point when :-

1 → MRS xy = \frac{Px}{Py}

Py

Px

2 → IC is convex at the point of equilibrium.

Hope it helps