How does utility move along an indifference curve?

An indifference curve shows a combination of two goods that give a consumer equal satisfaction and utility thereby making the consumer indifferent. Along the curve, the consumer has an equal preference for the combinations of goods shown—i.e. is indifferent about any combination of goods on the curve.

Do lower indifference curves produce more or less utility?

Since one point on the higher indifference curve is preferred to one point on the lower curve, and since all the points on a given indifference curve have the same level of utility, it must be true that all points on higher indifference curves have greater utility than all points on lower indifference curves.

Is utility constant along an indifference curve?

An indifference curve is a contour line where utility remains constant across all points on the line. Each point on an indifference curve represents a consumption bundle, and the consumer is indifferent among all consumption bundles on the indifference curve.

Why does a higher indifference curve represent a higher level of utility?

Higher indifference curve represents higher level of satisfaction to the consumer’. In other words, any combination of goods which lie on a higher indifference curve represents higher level of satisfaction as consumer is able to buy more of goods on a higher IC.

Why are indifference curves negatively sloped?

Indifference curves are negatively sloped because for a constant level of utility, if the consumer wants to increase the consumption of one good, she has to reduce the consumption of the other good.

When total utility diminishes marginal utility has tendency of being?

Relationship between Total and Marginal utility When the total utility is maximum, the marginal utility is zero. As the total utility starts diminishing, the marginal utility becomes negative.

Why is diminishing marginal utility important to the demand curve?

The law of diminishing marginal utility helps to explain the negative slope of the demand curve and the law of demand. If the satisfaction obtained from a good declines, then buyers are willing to pay a lower price, hence demand price is inversely related to quantity demanded, which is the law of demand.

Why indifference curve is negatively sloped?

The indifference curves must slope down from left to right. This means that an indifference curve is negatively sloped. It slopes downward because as the consumer increases the consumption of X commodity, he has to give up certain units of Y commodity in order to maintain the same level of satisfaction.