Properties of Indifference Curves

The main properties of indifference curve are as follows

1. Indifference curves are downward sloping curves. In order to consume more of one good, the consumption of other good needs to be sacrificed.

2. The slope of the indifference curve is depicts the Marginal Rate of Substitution between two goods. The more you have one good, the lesser and lesser of the other good is sacrificed. This means that the Marginal Rate of Substitution declines as we move down the indifference curve.

3. Higher the indifference curve, higher is the level of satisfaction.

4. Indifference curves do not intersect each other.

5. Indifference curves do not touch either of the axis.

What are Consumer Goods, Capital Goods and Intermediate Goods? With Examples

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Nominal vs Real GDP

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