Can indifference curve intersect

The indifference curves cannot intersect each other. It is because at the point of tangency, the higher curve will give as much as of the two commodities as is given by the lower indifference curve. This is absurd and impossible. In the above diagram, two indifference curves are showing cutting each other at point B.

The combinations represented by points B and F given equal satisfaction to the consumer because both lie on the same indifference curve IC2. Similarly the combinations shows by points B and E on indifference curve IC1 give equal satisfaction top the consumer. If combination F is equal to combination B in terms of satisfaction and combination E is equal to combination B in satisfaction.

It follows that the combination F will be equivalent to E in terms of satisfaction. This conclusion looks quite funny because combination F on IC2 contains more of good Y wheat than combination which gives more satisfaction to the consumer.

We, therefore, conclude that indifference curves cannot cut each other. One of the basic assumptions of indifference curves is that the consumer purchases combinations of different commodities. He is not supposed to purchase only one commodity.

In that case indifference curve will touch one axis. This violates the basic assumption of indifference curves. Such indifference curves are against our basic assumption. Our basic assumption is that the consumer buys two goods in combination.

Consumer would derive equal satisfaction at any point along a given indifference curve, as each point brings the same level of satisfaction to the consumer.

Hence consumer is indifferent about the various combinations of two goods along with the indifference curve. Indifference Curves are Negatively Sloped. Indifference curves are downward sloping. If the quantity of one goods is reduced, then you must have more of the other good to compensate for the loss. Higher indifference curves are preferred to lower ones, since more is preferred to less non-satiation.

Indifference curves are convex to the origin in most cases. The slope of the curve is referred as the Marginal Rate of Substitution. An introduction to positive economics fourth ed. ISBN Bruce R. Beattie and Jeffrey T. First, the very definition of the indifference curve itself: each one is formed by a combination of goods that produces the same satisfaction Utility. So, along an indifference curve, you will find combinations that provide the same satisfaction for a given customer.

Therefore, it doesn't make sense that a higher utility curve intersect a lower utility one, because it would contradict the utility values: at some interval, you could end up getting that the curve with the higher utility was below the lower utility one. Also, we can see them in graphic terms. Usually, indifference curves are formed by a combination of two goods alone, to simplify things for us - x and y , generally.

Thus, when we talk about utility curves we're dealing with a 3D graphic. As such, the utility consists of the edge of the 3D picture formed by combinations of x , y that produce the satisfaction U the 3rd axis. To make it even more visual, imagine the outside of a hat - that is somewhat the general format that a usual Utility function type, the Cobb-Douglas one, will end up graphing for you.

The key is to recognize that there are tradeoffs. As creators of software, we are faced with internal tradeoffs. We can only accomplish so much. We can only release a certain number of features in a given timebox.

And we make those tradeoffs based on ROI, or our perception of the balance between costs and return. Sometimes return is measured in purely financial terms. Sometimes, that return is measured in utility. Consider the decision process around a set of usability requirements. Should we make the application easier to learn, or faster to use? The answer is some of both. But we have to balance the need to get past the suck-threshold with creating word-of-mouth marketing and driving user adoption by designing for the competent user.

Understanding that each user has their personal set of tradeoffs helps us make these decisions. Utility is an abstract concept usually relegated to economics. What is it? How does it work? Not everyone has the same shape of utility curve. Improvements OK, understanding tradeoffs is nice, but what we want to understand more is how to improve the human condition. Practical Application This is fine, if theoretical. How do we use this as part of developing great software?