Hi Everyone,
This is a short video that briefly explains indifference curves and how they can be used to explain decision-making. Indifference curves and indifference curve analysis can be considered as part of consumer theory which investigates people’s purchasing behaviour. At the end of this post I have links to my other posts and videos relating to consumer theory and utility.
What is an indifference curve?
An indifference curve is a curve that shows all the combination of goods and/or services that yield the same level of utility. Indifference curves are typically represented on a two-dimensional plane for 2 goods or services. This is generally impractical for real world representation as people have a selection of a multitude of goods and services. Indifference curves can serve as good teaching tool. Indifference curve can help explain relationships between various types of goods (complements and substitutes).
Real life application of indifference curves
Indifference curves can be used to explain why people desire particular quantities of certain good and services. For example, if there was a shortage of bread. It is likely that demand for complements to bread such as jam, peanut butter, butter, and preserves will fall. This is because these goods are normally bought together. One has little value without the other. Indifference curves are an easy way to explain this type of phenomena compared to mathematical equations.
Questions
Below are two questions relating to the content of this video. The first person to get both questions correct will win 1 SBD. All attempts will receive an upvote. I will also upvote the most engaging comments , see here for more information.
Question 1
Question 2
Other related posts
For more information on indifference curves and other aspects of consumer theory, you can access my other posts and videos using the following links.
My indifference curves post can be accessed using the following link:
For more information regarding demand, supply and equilibrium, you can read my Steemit blog using the following link:
You can also watch my demand and supply video on Dtube using the following link:
For more information on utility, you can read my Steemit blog using the following link:
▶️ DTube
▶️ IPFS