In the general course of microeconomics are two key approaches: quantitative and ordinal.The first is based on the fact that the consumer evaluates the usefulness of the benefits he acquires.However, this assumption is in reality impossible to transfer almost no one bought goods comparison.For example, you want to buy pants and shoes, but how can we assess the usefulness of both the good?Of course, choosing between the first and second, you prefer the essentials, but you can not even imagine how much interest this subject useful to another.The task becomes more complicated as the number of benefits when comparing fall have whole sets.
To make it possible to study the usefulness of the purchased product or service, in practice, was created ordinal (sequential) approach.This doctrine stems from the quantitative assessment, but due to a principle of comparison is more widespread in practice.
base sequence approach is that the consumer does not evaluate the usefulness of a good and puts a kind of priorities according to personal preferences, environmental situation, public opinion.
To implement the theory of ordinal approach assumed that a consumer buys goods sets and compares their utility is subjective.In such a situation it can be used to analyze the plane on which is located the indifference curve.
Ordinate postponed the usefulness of one set of goods, on the horizontal axis - the second set.If the evaluation involved several sets at the same price, but with varying degrees of benefits to the consumer, we have a map of indifference.On a map of the indifference curve is not alone - there are several non-intersecting lines, and the higher is one of the graphs, the greater the utility carries a set of benefits.
is important to understand the meaning of indifference curves and their properties.If the first all is clear enough - they allow us to estimate the relative degree of usefulness of different sets of benefits and for the consumer to choose the most optimal component different sets of products, with the analysis of the second can be difficult.The fact that any indifference curve is convex and has a negative slope.As the cost can be attributed to characteristics such lines?
negative slope means that the increase in the amount of one good set of results in a decrease in the benefit of the second set.Indeed, it is easy to practice!The more we buy a product, the less we are able to buy a second, having some kind of a finite sum of money.Bulge, which has every curve of indifference, is inextricably linked with the concept of the marginal rate of substitution and explains the increase in the relative price of one set of goods relative to the other, depending on the number of products.
indifference curves not necessarily take the form of decreasing lines.Sometimes, in practice there are degenerate cases, and the schedule is converted into a straight line, horizontally or vertically.Suppose that a single set of consumer goods is not needed under any circumstances.Then, a consumer does not give any particular set of benefits to get an unnecessary thing.In such cases, the indifference curve is parallel to the x-axis.If the situation is repeated exactly the opposite - "curve" is parallel to the y-axis.
In conclusion, the indifference curve - this is a very important concept in economics that allows you to apply theory in practice, comparing tastes and not just one particular consumer, but also groups of customers, which is very important for the study of demand for certain groups of goods.
