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Economic Theory

All the points on this curve give equal level of satisfaction to the
consumer. Indifference curve is otherwise called “iso-utility curve”.
Indifference map is a group of indifference curves for two
commodities showing different levels of satisfaction. In this indifference

map, it should be clearly understood that a higher indifference curve
denotes higher level of satisfaction and a lower indifference curve

represents lower level of satisfaction. Being rational, the consumer will
always choose a higher indifference curve to get maximum satisfaction,
other things being equal.

Figure 6.2 – Indifference map

Properties of an indifference curve:

1. Indifference curves slope downwards to the right.
2. Indifference curves are convex to the origin.
3. No two indifference curves can ever cut each other.

As a consumer has a limited income, he spends it in such a manner so
as to obtain maximum level of satisfaction. He will attain equilibrium
when he gets maximum satisfaction from his expenditure on different
goods. Under the utility analysis explained earlier, a consumer gets

maximum satisfaction when marginal utilities from his different purchases
are equal. We can also explain the equilibrium of the consumer with the
help of the indifference curve analysis. For our analysis, we have to make

the following assumptions:
a) the consumer has before him an indifference map for a pair of
goods say, tea and biscuits. This map represents the preferences of the
consumer for the two goods. It is assumed that his scales of preferences

remain constant at a given time;

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