The indifference curves cannot intersect each other. It is because at the point of tangency, the higher curve will give as much as of the two commodities as is given by the lower indifference curve.

Can indifference curves cross?

An indifference curve shows a combination of two goods that give a consumer equal satisfaction and utility thereby making the consumer indifferent. Typically, indifference curves are shown convex to the origin, and no two indifference curves ever intersect.

What does it mean if indifference curves cross?

The crossing of two indifference curves presents a logical contradiction in the sense that the individual is behaving inconsistently or, as we would say, irrationally. Economists have often been criticized for their assumption that people are rational.

Why can’t indifference curves never cross?

Indifference curves never intersect, because by definition, all points on the same curve represent equivalent satisfaction. The red data point must have the same utility as the place where the curves cross. The green data point will also have the same utility as the place where the indifference curves intersect.

Do indifference curves ever cross in experiments?

1 That indifference curves can intersect has been experimentally verified in a different setting (Kahneman et al. 1991: 197).

Which assumption would be violated if indifference curves were to cross?

If an indifference curve ran from a to x, then bundle x would be no better than bundle a despite containing more of both goods. This upward slope of the indifference curve would be a violation of the nonsatiation assumption.

Can two indifference curves intersect explain your answer quizlet?

Explain why two indifference curves cannot intersect. more is preferred to less. But this violates transitivity, so indifference curves must not intersect.

Can indifference curve be concave?

Indifference curves can be straight lines if a slope is constant, resulting in an indifference curve represented by a downward-sloping straight line. If the marginal rate of substitution is increasing, the indifference curve will be concave to the origin.

Can indifference curve touch either axis?

An indifference curve cannot touch either axis. If it touches X-axis, as I2 in Figure 6 at U, the consumer will be having OM quantity of good X and none of Y. An indifference curve is convex to the origin. The convexity rule implies that as the consumer substitutes X for Y, the marginal rate of substitution diminishes.

Why are indifference curves bowed inward?

This is because people are more willing to trade away goods that they have in abundance and less willing to trade away goods of which they have little. These differences in a consumer’s marginal substitution rates cause his or her indifference curve to bow inward.

What are the assumptions of indifference curve analysis?

Assumptions of Indifference Curve Analysis: (1) The consumer acts rationally so as to maximise satisfaction. (2) There are two goods X and Y. (3) The consumer possesses complete information about the prices of the goods in the market.

What assumptions are necessary to prevent indifference curves from crossing?

What assumptions are necessary to prevent indifference curves from crossing? Select one:

• “x” and “y” are perfect substitutes.
• “x” and “y” are perfect complements.
• “x” and “y” are both bads.
• the indifference curves on the x,y graph will be upward sloping.

Can indifference curves be thick?

The indifference curves cannot be thick because if they are thick, they would be violating the non-satiation assumption.

Are indifference curves always downward sloping?

Indifference curves are downward in slope. An indifference curve measures the value a consumer receives from the consumption of two different products. If the level of satisfaction is high for the consumption of one good, it will be lower for the consumption of the second good. Thus, the curve must be downward sloping.

Do indifference curves have to be parallel?

(8) Indifference curves are not necessarily parallel to each other. Though they are falling, negatively inclined to the right, yet the rate of fall will not be the same for all indifference curves.

Which of the following is not true about indifference curves?

Answer: Two regular convex to origin indifference curves can intersect each other. This statement is not true because indifference curves can never intersect. An indifference curve is a graph showing a combination of two goods that give the consumer equal satisfaction and utility.

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