# indifference curve

(redirected from Utility curve)

## Indifference curve

The expression in a graph of a utility function, where the horizontal axis measures risk and the vertical axis measures expected return. The curve connects all portfolios with the same utility.

## Indifference Curve

A curve on a graph where the x-axis represents a quantity of one good and the y-axis represents a quantity of a second good where the curve represents the universe of quantities with the same utility for a rational investor. The indifference curve is convex, or roughly U-shaped.
Fig. 91 Indifference curve. A combination of OA units of product X, and OB units of product Y, yields exactly as much satisfaction to the consumer as does the combination of OC units of product X and OD units of product Y.

Indifference curves always slope downwards because, rationally, consumers will always prefer more of both products and so would not be indifferent between two combinations of products where one combination offers more of both. Specifically, they would only give up one product if they receive more of another for it, being indifferent as between combination E, which offers a lot of product X and little of product Y, and combination F which offers less product X and more product Y (see ECONOMIC MAN).

## indifference curve

a curve showing alternative combinations of two products, each of which gives the same UTILITY, or satisfaction. See Fig. 91 . Indifference curves are used (along with BUDGET LINES) to determine a consumer's equilibrium purchases of two products and to analyse the effect of changes in the relative prices of these two products upon quantities demanded (see PRICE EFFECT). See CONSUMER EQUILIBRIUM, INDIFFERENCE MAP.
References in periodicals archive ?
Based on this input, our utility curve looks like the Days in the Shop graph in the Reliability section of Figure 3.
Also, it can be noticed that all the upper set of utility curve are convex that illustrates the property of quasi-concavity of utility function.
All parties involved with the utility curve will be glad you did.
A mathematician might draw a utility curve to find the point at which it no longer makes sense to shell out for a service; everyone else just goes on their gut feeling.
In fact, in comparing the marginal-utility curves of Tom, Dick, and Harry Class, there are any number of reasons why Harry's marginal utility curve might decline less steeply than Tom's and Dick's.
When there is a proportional cost, the customer's utility curve is tangent to the more shallow budget line at a point [[beta].
The representation used by Wicksteed in the Alphabet was the marginal utility curve y = a/(x + b) - 1 (sometimes represented as y = (c - x)/(x + b), where c = (a - b)) and a corresponding logarithmic total utility curve of the general form y = a ln (x + b) - ln b - x.
The departmental teaching load (DTL) utility curve is asymmetric around the normal departmental teaching load (NDTL).
Other demonstrations in Fox's series show an animated skier skiing down a consumer indifference curve and a small hamburger riding to the top of a total utility curve.
3] The inverse relationship between amenity value and population in equation [5] can be seen by considering the area under the marginal utility curve of amenity.

Site: Follow: Share:
Open / Close