Indifferent: People and Curves

Learn about Indifference curves with Patch Adams.

Case breakdown: Movie Patch Adams:

According to the English dictionary Indifference implies lack of interest, concern or sympathy. As Robin Williams states in this particular scene from the movie’ Patch Adams’, “lets’ 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.

What is Indifference Curve?

During 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 the utility can be measured, consumer decides a combination of goods on the basis of rationality. 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 additional unit of beer.

To evaluate 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 suggests that consumer is indifferent between these combinations which means every point on IC represents an equal amount of satisfaction for the consumer.

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

Indifference curves slopes 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 car and petrol or printer and ink cartridges etc.

Are you indifferent?

Written by: Ms. Gitika Chandra


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