Why is indifference curves are convex to the origin

The curve could not be concave, as this would mean that the marginal rate of substitution increases which is not possible as the consumer gives up one good for another. Upvote 3. Yuvraj Bhardwaj Aug 20, MRS means how much of commodity X you are ready to give up for getting 1 commodity Y.

MRS diminishes because of law of DMU which states that as we increase the consumption of one commodity, the utility starts falling on every successive consumption. So in this case on every consumption of commodity Y, the utility will fall and we will start giving less quantity of commodity X to get commodity Y.

Upvote 1. This discussion on Why IC is convex to the origin? If the answer is not available please wait for a while and a community member will probably answer this soon. Apart from being the largest Commerce community, EduRev has the largest solved Question bank for Commerce.

Upgrade to Infinity. By continuing, I agree that I am at least 13 years old and have read and agree to the terms of service and privacy policy. For Your Perfect Score in Commerce. The Best you need at One Place. Start Your Infinity Experience. Forgot Password. The indifference curves for any individual cannot cross. The slope of an indifference curve at any point shows the marginal rate of substitution between the goods, and the elasticity of substitution measures its curvature.

Assume the consumer prefers more of every good to less. Then commodity bundles above an indifference curve are preferred to those on it, and these are preferred to those below. The indifference curve will also be downward-sloping. Indifference curves are convex to the origin if the consumer prefers variety some amount of every good to either good alone, but this is not a logical necessity.

If it is assumed instead that the consumer prefers less of one of the goods, for example labour, then the indifference curves slope upwards. See also community indifference curve. From: indifference curve in A Dictionary of Economics ». Subjects: Social sciences — Economics. View all related items in Oxford Reference ».

Search for: 'indifference curve' in Oxford Reference ». Here, MRS shows the slope of the indifference curve. National education day: e-learning transforming educational landscape. Understanding the importance of education with e-learning transforming.

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