21-2b Four Properties of Indifference Curves Because indifference curves represent a consumer’s preferences, they have certain
properties that reflect those preferences. Here we consider four properties that
describe most indifference curves:
• Property 1: Higher indifference curves are preferred to lower ones. People usually
prefer to consume more goods rather than less. This preference for greater
quantities is reflected in the indifference curves. As Figure 2 shows, higher
indifference curves represent larger quantities of goods than lower indiffer-
ence curves. Thus, the consumer prefers being on higher indifference curves.
• Property 2: Indifference curves are downward sloping. The slope of an indifference
curve reflects the rate at which the consumer is willing to substitute one good
for the other. In most cases, the consumer likes both goods. Therefore, if the
quantity of one good is reduced, the quantity of the other good must increase
for the consumer to be equally happy. For this reason, most indifference curves
slope downward.
• Property 3: Indifference curves do not cross. To see why this is true, suppose
that two indifference curves did cross, as in Figure 3. Then, because point
A is on the same indifference curve as point B, the two points would make
the consumer equally happy. In addition, because point B is on the same
FIGURE 3 The Impossibility of Intersecting Indifference Curves a situation like this can
never happen. according to
these indifference curves, the
consumer would be equally
satisfied at points a, B, and C,
even though point C has more of
both goods than point a.
Quantity of Pizza Quantity of Pepsi 0
C
A
B
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