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Unit-4: Ordinal Utility Theory: Indifference Curve Approach

2. Preference means shifting from lower ............... curve to higher indifference curve. Notes
3. Higher indifference curve represents higher level of .............. .

4.4 Indifference Map
An indifference curve indicates different combinations of two commodities which yield a given level
of satisfaction to the consumer. In order to indicate higher or lower level of satisfaction of different
combinations of different products, we have to make use of different indifference curves. When
these indifference curves their groups are shown by a diagram, then it is called indifference map.
Thus indifference map is that graph which represents a group of indifference curves each of which
expresses a given level of satisfaction. In Fig. 4.2, indifference map is shown. In the diagram quantity
of apples is shown on axis OX and quantity of oranges is shown on axis OY. I , I , I and I are
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2
3
4
different indifference curves. Each indifference curve is representing different level of satisfaction.
As an indifference curve shifts to the right, the level of satisfaction goes on increasing. In this diagram
I represents the combination yielding maximum satisfaction. Combination of I curve yields less
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4
satisfaction than combination of I . I curve represents the combination yielding least satisfaction.
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1
For instance, in Fig. 4.2 at point D of I , a consumer consumes 4 apples plus 4 oranges. If the consumer
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consumes 4 apples plus 5 oranges, naturally his level of satisfaction will be more and in this way he
will shift to point F of I . Similarly if the consumer consumes 6 apples plus 4 oranges, his level moves
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to point G of I . So we can say that point F and G which lie on the indifference curve I yield more
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3
level of satisfaction than point D which lies of I . If consumer consumes 8 apples plus 4 oranges, his
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satisfaction will be more than at point G and he will
move to point E of I . Thus, from the point of view of An indifference curve right and higher than
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satisfaction I > I > I > I . In other words, any another indifference curve represents higher level of
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4
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2
indifference curve which will be right to another satisfaction. Indifference means mobility from one
will be called higher indifference curve and will point to another on a curve itself but Preference
yield higher satisfaction. Any combination located means shifting of lower indifference curve to
on the higher indifference curve will be liked more higher indifference curve. The reason is that higher
indifference curve represents higher level of income.
than any combination of lower indifference curve.
Fig. 4.2
Y
Indifference
10 l 4 Map
l
9 l 2 3
8 l 1
7
Oranges 5 F G E l
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4
3 D l 2 l 3 4
2 l 1
1
O X
1 2 3 4 5 6 7 8
Apples

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