Evaluate what happens to the d
Evaluate what happens to the direction of an indifference curvefor each of the following cases. Construct and indifference map foreach case and indicate the direction in which total utilityincreases.
a. The good on the y-axis is a “good” good and the good on thex-axis switches from a “good” to a “bad” or a “bad” to a“good.”
b. The good on the y-axis is a “bad” good and the good on thex-axis switches from a “good” to a “bad” or a “bad” to a“good.”.
c. The good on the x-axis is a “good” good and the good on they-axis switches from a “good” to a “bad” or a “bad” to a“good.”.
d. The good on the x-axis is a “bad” good and the good on they-axis switches from a “good” to a “bad” or a “bad” to a“good.”
Answer:
An indifference curve is thelocus of points -particular combinations or bundles of goods whichyield the same level of satisfaction to the consumer, so that he isindifferent as to the particular combinations he consumes. Anindifference map is the graphical representations of all theindifference ,which rank the preference of the consumercombinations of goods situated in an indifference curve yield thesame utility. Combinations of the goods lying on the higherindifference curve yield the higher satisfaction and vice versa.Normal indifference curve is a convex to the orgin. But inthe caseof good commodity and bad commodity cases it will altered. if bothcommodity are good then indifference curve become convex to theorgin but both are bad then curve become congave to the orgin. ifone commodity good and another is bad then curve convex to the badcommodity.that mean if Y is bad then indifference curve convex tothe y axis.
in the attached diagram (A)shows X is bad and Y is good figure(B) shows Good Y is bad situation . fig(C) shows the both the goodsare economic bad the figure (E) shows the boh good are economicgood. THE diagram(D) describe the transformation of the good to badand bad to good.in that figure shows the AC portion bothXand Y aregood but inthe portion X is become bad and Y is good. In the BDportion shows the transformation of both are turn economic bad Xoand Yo portion both are become bad. athe portion of DA y turn Badbut X turn good.
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