Question

It is assumed that the consumer has a fixed amount of money, pole of which to be spend on two goods.Is this the assumption of indifference curve? True False​

Answer 1

An indifference curve, with respect to two commodities, is a graph showing those combinations of the two commodities that leave the consumer equally well off or equally satisfied—hence indifferent—in having any combination on the curve.

Indifference curves are heuristic devices used in contemporary microeconomics to demonstrate consumer preference and the limitations of a budget. Economists have adopted the principles of indifference curves in the study of welfare economics.