What is the Indifference curve?

Learn about Indifference curves with Patch Adams.

Case breakdown: Movie Patch Adams:

According to the English dictionary, Indifference implies a lack of interest, concern, or sympathy. As Robin Williams states in this particular scene from the movie Patch Adams, “Let’s fight the most terrible diseases of all, Indifference.” He is asking to change the definition of a doctor where he talks about not just treating a disease but treating a person.

To fight the disease one needs to understand what indifference is exactly.

In this blog, Learning Perspectives will explore the meaning of the indifference curve.

What is the Indifference Curve?

In 1881 Francis Y Edgeworth developed a theory of Indifference curves (IC), later Pareto, an Italian economist, actually drew the curves. This was done to understand consumer behavior. This theory suggested that utility can be measured, the consumer decides on a combination of goods on the basis of rationality. The consumer is also assumed to be consistent in his/her choices. For e.g. if a consumer prefers Lays Masala chips to Kurkure in one period, he/she will not choose Kurkure in another period or be indifferent to both of them.

Diminishing marginal rate of substitution applies too which means consumers’ willingness to give up one slice of pizza in order to get an additional unit of beer.

To evaluate the Indifference curve analysis, let’s understand this through an example of Pizza and Beer.

Indifference Schedule:

CombinationSlices of PizzaBottles of Beer
A      1       15
B      2       13
C      3       10
D      4       08
E      5       06

All points on the indifference curve suggest that the consumer is indifferent between these combinations which means every point on IC represents an equal amount of satisfaction for the consumer.

The consumer is happy when he is having 15 bottles of beer and 1 slice of pizza but he is also equally happy when he consumes 6 bottles of beer and 5 pizza slices.

Indifference curves slope downwards to the right and are convex to the origin. This theory changes when products are either perfect substitutes or complements of each other. For e.g. Substitutes can be an apple phone or an android phone, while complements can be a car and petrol or printer and ink cartridges etc.

Are you indifferent?


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