Uses of Indifference Curve Analysis

Indifference curve analysis is useful when studying welfare economics as follows:

1. They are used to indicate the amount of income and leisure combination that can yield a given level of satisfaction allowing for the measure of trade off between leisure and income.
2. Since each indifference curve represents a given level of welfare, in an indifference map, the curve to the right represents a higher level of welfare. This is useful in analysing the effect taxation on the standard of living in an economy. A tax level may reduce the economic standard of the people and vice versa.
3. Employees use indifference curve analysis to decide whether to give employees housing facility in kind or in money allowance in a manner not to affect their welfare.

Posted Date: 11/27/2012 5:39:42 AM | Location : United States

Ask an Expert

Related Discussions:- Uses of indifference curve analysis, Assignment Help, Ask Question on Uses of indifference curve analysis, Get Answer, Expert's Help, Uses of indifference curve analysis Discussions

Write discussion on Uses of indifference curve analysis
Your posts are moderated

Write your message here..

Related Questions

Income elasticity of demand, Income elasticity of demand The income el... Income elasticity of demand The income elasticity of demand measures the degree of responsiveness of the quantity demanded of a product to changes in income.  Its co-efficient

CASE LET, is indian companies running a risk by not giving attention to cos... is indian companies running a risk by not giving attention to cost cutting?

Marginal and average cost curves, Relationship between AC, AVC, AFC and MC ... Relationship between AC, AVC, AFC and MC is elucidated graphically by drawing respective cost curves in Figure below. Behaviour of cost curves is elucidated below. Figure:

Why managers need to know economics, WHY MANAGERS NEED TO KNOW ECONOMICS ... WHY MANAGERS NEED TO KNOW ECONOMICS The influence of economics towards the performance of managerial duties and responsibilities is of major importance. The importance and cont

Gains from international trade, Gains From International Trade The gai... Gains From International Trade The gains from International trade are to make the participating countries better of than they would have otherwise been.   This will be the res

Describe the gift exchange model of reciprocity, Q. Describe the gift excha... Q. Describe the gift exchange model of reciprocity? George Akerlof (1982) develops a gift exchange model of reciprocity in that employers offer wages unrelated to variations in

What is the minimum cost of producing each level of output, Suppose that in... Suppose that in an isoquant mapping, you should consider three isoquants with 1000, 2000 & 3000 units of output. The price of capital is Rs 2 a unit, and the price of labor is Rs 1

Show the fixed proportion production function, Q. Show the Fixed Proportion... Q. Show the Fixed Proportion Production Function? A fixed proportion production function is one in that technology needs a fixed combination of inputs, say labour and capital,

Econ600, 250 word essay: A New Hampshire resort offers year-round activitie... 250 word essay: A New Hampshire resort offers year-round activities: in winter, skiing and other cold-weather activities; in the summer, golf, tennis, and hiking. The resort’s oper

Smplex method, examples examples