Question

Evaluate what happens to the direction of an indifference curve for each of the following cases. Construct and indifference map for each case and indicate the direction in which total utility increases.

a. The good on the y-axis is a “good” good and the good on the x-axis switches from a “good” to a “bad” or a “bad” to a “good.”

b. The good on the y-axis is a “bad” good and the good on the x-axis switches from a “good” to a “bad” or a “bad” to a “good.”.

c. The good on the x-axis is a “good” good and the good on the y-axis switches from a “good” to a “bad” or a “bad” to a “good.”.

d. The good on the x-axis is a “bad” good and the good on the y-axis switches from a “good” to a “bad” or a “bad” to a “good.”

Answer 1

An indifference curve is the locus of points -particular combinations or bundles of goods which yield the same level of satisfaction to the consumer, so that he is indifferent as to the particular combinations he consumes. An indifference map is the graphical representations of all the indifference ,which rank the preference of the consumer combinations of goods situated in an indifference curve yield the same utility. Combinations of the goods lying on the higher indifference curve yield the higher satisfaction and vice versa. Normal indifference curve is a convex to the orgin. But inthe case of good commodity and bad commodity cases it will altered. if both commodity are good then indifference curve become convex to the orgin but both are bad then curve become congave to the orgin. if one commodity good and another is bad then curve convex to the bad commodity.that mean if Y is bad then indifference curve convex to the y axis.

in the attached diagram (A)shows X is bad and Y is good figure (B) shows Good Y is bad situation . fig(C) shows the both the goods are economic bad the figure (E) shows the boh good are economic good. THE diagram(D) describe the transformation of the good to bad and bad to good.in that figure shows the AC portion bothXand Y are good but inthe portion X is become bad and Y is good. In the BD portion shows the transformation of both are turn economic bad Xo and Yo portion both are become bad. athe portion of DA y turn Bad but X turn good.