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indifference curve |
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A plot of combinations of quantities of two things, such that an individual is indifferent as to which combination to choose (see figure). Indifference curves are part of the analytical geometry of neo-classical economics. In their usual form they show combinations of two commodities which provide consumers with the same level of satisfaction or utility. As consumers move along the curve, they are trading off one commodity for the other; if behaving rationally they would choose the combination which costs least (cf. Alonso model; von Thünen model). (DMS)
{img src=show_image.php?name=bkhumgeofig32.gif }
indifference curves Maximization of consumer satisfaction (at 0) with ten units of Y and 25 of X, where the higher indifference curve just touches the budget constraint representing what the customer has to spend |
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