Indifference Curve Analysis

Follow this resource to learn more about the concept of indifference curves. Make sure to answer the "Try It" quiz questions that show you the correct answer.

1. What you’ll learn to do: find consumer equilibrium using indifference curves and a budget constraint

Although numbers can be used to illustrate consumer preferences, economists don't believe that we can objectively measure someone's utility. In this section, you'll learn an alternative way of identifying consumer equilibrium that only requires that you can rank preferences - that is, you can say whether you prefer Option A to Option B.


  • Describe the purpose, use, and shape of indifference curves
  • Explain how one indifference curve differs from another
  • Explain how to find the consumer equilibrium using indifference curves and a budget constraint

Economists use the vocabulary of maximizing utility to describe consumer choice. So far in the text, we have described the level of utility that a person receives in numerical terms. This section presents an alternative approach to describing personal preferences, called indifference curve analysis, which avoids the need for using numbers to measure utility. By setting aside the assumption of putting a numerical valuation on utility - an assumption that many students and economists find uncomfortably unrealistic - the indifference curve framework helps to clarify the logic of the underlying model.

Source: Steven Greenlaw and Lumen Learning,
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