The Construction of Indifference Curves:
The consumer’s preferences can be shown in a diagram with an indifferences curve. The indifferences curve shows nothing about the absolute amounts of satisfaction obtained. It merely indicates a set of consumption bundles that the consumer views as being equally satisfactory.
In the given figure, we measure the quantity of wheat along X-axis (in kilograms) and along OY-axis, the quantity of rice (in kilograms). 1C is an indifference curve. It is shown in the diagram that a consumer may buy 12 kilograms of rice and 5 kilograms of wheat or 9 kilograms of rice and 15 kilograms of wheat. Both these combinations are equally preferred by him and he is indifferent to these two combinations. When the scale of preferences of the consumer is graphed, by joining the points a, b, c, d, e, we obtain indifference Curve IC. Every point on indifference curve represents a different combination of the two goods and the consumer is indifferent between any two points on the indifference curve. All the combinations are equally desirable to the consumer. The consumer is Indifferent as to which combination he receives. The indifference curve IC thus is a locus of different combinations of two goods which yield the same level of satisfaction.
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