- noun a graph used with the ‘budget line’ to show the different quantities of goods which give the customer the same amount of satisfaction
- (written as Indifference Curve)A locus of points in a diagram having two goods, one on each axis, such that an individual is indifferent between all points on the curve. The curve is usually axiomatically taken to be convex to the origin, reflecting a diminishing marginal rate of substitution, and indicating that both goods are economic goods. If an individual is indifferent between two options, this is generally taken in economics to be equivalent to the statement that the two options have equal utility. A family of indifference curves (an 'indifference map') shows successive curves like contours on a geographical map. As one moves in a north-easterly direction each indifference curve is associated with a higher utility number. An alternative name for an indifference curve is an 'iso-utility curve'. The geometry gets complicated when there are more than two goods, though three dimensions have been used, even in health economics, e.g. Culyer (1971a).
- synonymIso-utility Curve
- noun a line on a graph that joins various points, each point representing a combination of two commodities, each combination giving the customer equal satisfaction