What are the 4 properties of indifference curves?

The four properties of indifference curves are: (1) indifference curves can never cross, (2) the farther out an indifference curve lies, the higher the utility it indicates, (3) indifference curves always slope downwards, and (4) indifference curves are convex.

What are the properties of different curve?

There are four important properties of indifference curves that describe most of them: (1) They are downward sloping, (2) higher indifference curves are preferred to lower ones, (3) they cannot intersect, and (4) indifference curves are convex (i.e. bowed inward).

What is the difference between indifference curve and budget line?

A budget line shows combinations of two goods a consumer is able to consume, given a budget constraint. An indifference curve shows combinations of two goods that yield equal satisfaction. To maximize utility, a consumer chooses a combination of two goods at which an indifference curve is tangent to the budget line.

What is the indifference curve what are its properties?

An indifference curve is a graphical representation of various combinations or consumption bundles of two commodities. It provides equivalent satisfaction and utility levels for the consumer. It makes the consumer indifferent to any of the combinations of goods shown as points on the curve.

What are the properties of budget line?

Features of Budget Line Negative slope: If the line is downward, it shows a reverse correlation between the two products. Straight line: It indicates a continuous market rate of exchange in individual combinations. Real income line: It denotes the income and the spending size of a customer.

What is budget line in economics?

A budget line shows the combinations of two products that a consumer can afford to buy with a given income – using all of their available budget.

What is the difference between budget line and budget set?

The price of different combinations of two goods is less than or equal to the consumer’s income. A Budget Line is the borderline that contains the Budget Set. A Budget Set is the total combination of different sets of two goods that helps draw the Budget Line.

What are the features of budget line?

Properties of budget line

  • Budget line is a straight line.
  • Budget line has a negative slope.
  • The slope of the budget line is negative of the price ratio.
  • Budget line is tangent to indifference curve.

What is meant by budget line?

Budget line definition The budget line is a graphical delineation of all possible combinations of the two commodities that can be bought with provided income and cost so that the price of each of these combinations is equivalent to the monetary earnings of the customer.

What is the difference between budget line and budget equation?

A Budget Line is the borderline that contains the Budget Set. A Budget Set is the total combination of different sets of two goods that helps draw the Budget Line. The different combinations of two goods are equal to the income of the consumer.

What are the two features of budget line?