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Question

Which one of the following is not the basic property of indifference curves ?

The correct answer is
Indifference curves of two imperfect substitutes are concave to the point of origin

The question asks to identify which statement is NOT a fundamental property of indifference curves used in microeconomics.

Analyzing Indifference Curve Properties

Let's examine each option:

  • Negative Slope: This is a standard property. Indifference curves slope downwards from left to right, indicating that to consume more of one good, one must consume less of another to maintain the same level of satisfaction. This reflects the trade-off between goods.
  • Concavity to the Origin: This is NOT a standard property. Typically, indifference curves are convex to the origin. Convexity arises from the assumption of a diminishing marginal rate of substitution (MRS), meaning consumers are willing to give up progressively less of good Y to obtain one more unit of good X as they consume more X. Concavity would imply an increasing MRS, which is generally not observed for typical goods (especially imperfect substitutes).
  • Non-Intersection: This is a crucial property. Indifference curves for the same consumer cannot intersect. If they did, it would imply inconsistent preferences, violating the assumption of transitivity (if A > B and B > C, then A > C).
  • Higher Satisfaction on Upper Curves: This property stems from the assumption that 'more is better' (non-satiation). Indifference curves located further away from the origin represent combinations with larger quantities of goods, thus providing a higher level of utility or satisfaction.

Conclusion on Non-Property

Based on the analysis, the statement that indifference curves are concave to the origin for imperfect substitutes is incorrect. The standard assumption is convexity due to diminishing MRS.

Therefore, the correct option is the one stating concavity as a property.

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Important Questions from Indifference curve analysis

  1. Indifference curve theory states that:

  2. What is constant along an indifference curve?

    (1) Level of Utility
    (2) Level of Output
    (3) Level of Price

  3. In the case of two production-inputs. which one of the following is not a property of Isoquants (the production indifference curves)?

  4. Which of the following explains the declining slope of indifference curves?

    (A) Diminishing marginal utility 

    (B) Diminishing Marginal Rate of substitutions between the commodities

    (C) Diminishing Marginal Rate of technical substitution

    (D) Ordinal measurement of utilities

    (E) Diminishing Marginal utility of money 

    Choose the most appropriate answer from the options given below:

  5. Which of the followings are the properties of Indifference Curve? 

    A. Indifference curve slopes downward to right 

    B. Indifference curve is concave to origin 

    C. Indifference curve is convex to origin 

    D. Indifference curves cannot intersect each other but can be tangent to each other 

    E. Higher indifference curve represents higher level of satisfaction 

    Choose the correct answer from the options given below : 

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