Topic
Indifference Curves
General Objective
Indifference curves are used to derive an individual consumer’s demand for goods. In the case of two goods, an indifference curve depicts alternative combinations of the quantity of good 1 and the quantity of good 2 between which the consumer is indifferent. Put differently, all baskets of goods consisting of combinations of the quantity of good 1 and the quantity of good 2 described by the points along an indifference curve yield exactly the same level of utility for the consumer. Given the preferences of the specific individual at hand, any combination of quantities of the two goods along an indifference curve is just as good and no better than any other such combination.
Visualisation Group
Go to the visualisation group below, and choose your preferred option for how the visualisation is presented when it first loads.
The purpose of this visualisation is to show how an individual consumer's indifference curves react to changes in the values of the parameters that define a constant elasticity of substitution (CES) utility function.