In order to know the meaning of the term indifference curve, it is necessary, first, to discover the etymological origin of the two main words that give it shape:
-Curve, in the first place, comes from Latin. Specifically, it derives from “curvus”, which can be translated as “curved”.
-Indifference, secondly, also emanates from Latin. In his case, it derives from “indifferentia”, which is synonymous with “the quality of not distinguishing” and which is the result of the sum of four delimited components: the prefix “in-”, which means “no”; the element “dis-“, which is synonymous with “separation”; the verb “ferre”, which can be translated as “carry”; and the suffix “-ia”, which is used to indicate “quality”.
- Abbreviationfinder: Find definitions of English word – Arts. Commonly used abbreviations related to word are also included.
In the field of economics, it is usual to appeal to the notion of a curve with reference to the graphical representation of the magnitude of a phenomenon: demand curve, supply curve, etc.
In this opportunity we are going to focus on the concept of indifference curve, which allows knowing the different combinations of products that offer the buyer the same degree of satisfaction. This makes it possible to analyze consumer behavior.
To obtain the indifference curve, the individual must be asked what combination of two products he or she prefers, varying the amounts of each one. The greater the quantity of a product R, the quantity of the product S decreases and vice versa. Arriving at two options that are indifferent to the person, both points are on the same indifference curve. On this curve, all the points give you the same level of satisfaction.
What the indifference curve does is reveal preferences between pairs of products, regardless of the price of the good or the consumer’s income. On the indifference curve, in fact, the different points have different monetary values, although the satisfaction they provide to the consumer is the same.
An indifference curve can be drawn by combining pizzas and empanadas, for example. The consumer can choose different combinations: 4 pizzas and 24 empanadas, 6 pizzas and 18 empanadas, 8 pizzas and 12 empanadas, etc. The curve reveals how many pizzas he is willing to give up to buy more empanadas, and the same but in reverse (how many empanadas he would give up to get more pizzas).
In addition to everything indicated, we cannot ignore an important series of data or characteristics of regular indifference curve flames, such as these:
– They do not cut each other.
-They have a negative slope.
They are convex to the origin.
-The further they are from the origin, the higher the level of utility they have.
-The slope of an indifference curve responds to the name of marginal rate of substitution.
Also, you have to know that there are several types of indifference curves. Specifically, among the most frequent ones we can speak, for example, of both the indifference curves of goods that are perfect complements, as well as the so-called indifference curves of goods that are perfect substitutes.