Two indifference curves cannot intersect Rating:
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Indifference curves are graphical representations of the different combinations of goods or services that would give a consumer equal levels of satisfaction. In other words, an indifference curve shows the different bundles of goods or services that a consumer is willing to accept in exchange for giving up a particular good or service.
One of the key characteristics of indifference curves is that they cannot intersect. This is because if two indifference curves intersect, it would mean that a consumer is willing to accept two different combinations of goods or services that give them the same level of satisfaction. This is not possible, as it violates the basic principle of consumer behavior, which is that a consumer will always choose the combination of goods or services that gives them the highest level of satisfaction.
There are a few reasons why indifference curves cannot intersect. First, if two indifference curves intersect, it would create a contradiction in the consumer's preferences. For example, if a consumer has two indifference curves that intersect, it would mean that they are willing to accept both combination A and combination B in exchange for a particular good or service. However, this would mean that the consumer is indifferent between combination A and combination B, which is not possible. A consumer will always prefer one combination over another, as they will always choose the combination that gives them the highest level of satisfaction.
Second, if two indifference curves intersect, it would violate the principle of diminishing marginal utility. The principle of diminishing marginal utility states that as a consumer consumes more of a particular good or service, the marginal utility (or the additional satisfaction) they receive from consuming each additional unit of that good or service decreases. This means that a consumer will always prefer a combination of goods or services that gives them a higher level of total satisfaction, rather than a combination that gives them the same level of total satisfaction. Therefore, if two indifference curves intersect, it would mean that the consumer is willing to accept two different combinations of goods or services that give them the same level of total satisfaction, which is not possible.
In conclusion, two indifference curves cannot intersect because it would create a contradiction in the consumer's preferences and violate the principle of diminishing marginal utility. Indifference curves are a useful tool for understanding consumer behavior, but it is important to remember that they have certain limitations and characteristics that must be taken into account when analyzing consumer decision-making.
Why can't indifference curves intersect?
. Show that for a two-good economy, both goods can- not be luxuries. What is the indifference curve for Bads? Diagram:In the above diagram, two indifference curves are showing cutting each other at point B. An economic bad is the opposite of an economic good. Can indifference curves loading ever cross? Note that the 2D that we generally use is nothing but the planification of the 3D view. The combinations represented by points B and F given equal satisfaction to the consumer because both lie on the same indifference curve IC2. .
It would mean that indifference curves representing different levels of satisfaction are showing the same level of satisfaction at the point of intersection or contact. It must be preferred to point 'B' by the assumption of non-satiety. Why do consumers prefer higher indifference curves? We can prove this property of indifference curves through contradiction. The optimal indifference curve is the one furthest away from the origin. Information about Indifference curves never intersect each other due to:a Different levels of satisfactionb Same levels of satisfactionc Convex to origind Concave to originCorrect answer is option 'A'. Can two goods be luxury at the same time? How is the indifference curve look like for bad goods? In the case of bads, indifference curves are of different shape.
The combinations represented by points B and F given equal satisfaction to the consumer because both lie on the same indifference curve IC2. Indifference curves cannot intersect each other as it would break down the indifference curve analysis. It means only one indifference curve will pass through a given point on an indifference map. Further, points 'A' and 'C lie on the same indifference curve IC implying same level of satisfaction to the consumer. Can indifference curve thick? Further, points 'A' and 'C lie on the same indifference curve IC implying same level of satisfaction to the consumer. What is an L shaped indifference curve? Indifference curves never intersect, because by definition, all points on the same curve represent equivalent satisfaction.
How is the indifference curve look like for bad goods?
All points along a single indifference curve provide the same level of utility. Can you explain this answer?. Are substitution and income effects the same on indifference curves? Therefore, if a higher quantity is demanded of one good, a higher quantity will also be demanded of the other, and vice versa. Thus, when we talk about utility curves we're dealing with a 3D graphic. Can you explain this answer? In short, the slope of the indifference curve changes because the marginal rate of substitution—that is, the quantity of one good that would be traded for the other good to keep utility constant—also changes, as a result of diminishing marginal utility of both goods.
Check out below the positive part of the 3D graph and then take a look at the 2D graph below. Solution By Examveda Team Indifference curves are convex to the origin because two goods are imperfect substitutes. This is absurd and impossible. How can we distinguish goods from bad in economics? This is absurd and impossible. Consider points 'B' and 'A' on IC1. What is the tangency condition between the indifference curve and budget line? Consider points 'B' and 'A' on IC1.
(i) "two indifference curves cannot touch or intersect each other". explain why
Since a higher indifference curve represents a higher level of satisfaction, a consumer will try to reach the highest possible IC to maximize his satisfaction. Now, by the assumption of transitivity, points 'B' and 'C' yield same level of satisfaction to the consumer. Also, we can see them in graphic terms. This conclusion looks quite funny because combination F on IC2 contains more of good Y wheat than combination which gives more satisfaction to the consumer. It would mean that indifference curves representing different levels of satisfaction are showing the same level of satisfaction at the point of intersection or contact. What are bads counted as goods? How do you find the marginal rate of substitution between two goods? Can two indifference curve have the same utility? What happens if indifference curves intersect each other? More importantly though, we need to remember that ALL POINTS ON AN INDIFFERENCE CURVE HAVE THE SAME UTILITY. Find important definitions, questions, meanings, examples, exercises and tests below for Indifference curves never intersect each other due to:a Different levels of satisfactionb Same levels of satisfactionc Convex to origind Concave to originCorrect answer is option 'A'.
Why two indifference curves can never intersect each other?
It must be preferred to point 'B' by the assumption of non-satiety. Can you have two inferior goods? How many utils does the consumer get from the indifference curve? Can you explain this answer? So being that they are different curves, we expect them to have different utilities. How do you know if two goods are substitutes or complements? When two goods are perfectly complementary IC is? Because if they intersected, they would not be "indiffernece" curves. It follows that the combination F will be equivalent to E in terms of satisfaction. Where do the indifference and leisure time curves intersect? When two goods are perfect substitutes the indifference curve is convex to the origin Mcq? An inferior good will see the quantity fall as income rises.
For example, air pollution, traffic congestion, passive smoking etc. Can you explain this answer? We determine whether goods are complements or substitutes based on cross price elasticity — if the cross price elasticity is positive the goods are substitutes, and if the cross price elasticity are negative the goods are complements. We can prove this property of indifference curves through contradiction. Because two combinations having different utility levels cannot be on same indifference curve, it cannot be thick. Point 'C' is taken just above point 'B', such that it contains same amount of commodity 'X' and more amount of commodity' Y'. Further, intersection of two indifference curves also violates the assumption of positive marginal utilities of the two commodity. It would mean that every point on the two separate indifference curves would have the same utility, which is the complete opposite of the first rule of indifference curves, that all points on them have the same utility.
Indifference curves never intersect each other due to:a)Different levels of satisfactionb)Same levels of satisfactionc)Convex to origind)Concave to originCorrect answer is option 'A'. Can you explain this answer?
In order to do so, he has to buy more goods and has to work under the following two constraints: He has to pay the price for the goods and. This upward slope of the indifference curve would be a violation of the nonsatiation assumption. Therefore, indifference curves can never intersect or touch each other. Therefore, it doesn't make sense that a higher utility curve intersect a lower utility one, because it would contradict the utility values: at some interval, you could end up getting that the curve with the higher utility was below the lower utility one. What happens when two goods are complements? We can refer to each curve by its utility value, call them x and y.
If the consumer values apples, for example, the consumer will be slower to give them up for oranges, and the slope will reflect this rate of substitution. If two goods X and Y are perfect substitutes, the indifference curve is a straight line with negative slope, as shown in Figure 41 because the MRSXY is constant. . This is because the consumer would have more than one point on the indifference curve giving him a different level of satisfaction. Can you explain this answer? What is the slope of an indifference curve? An indifference curve is drawn on a budget constraint diagram that shows the tradeoffs between two goods.
