Uses of indifference curve analysis, Managerial Economics

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







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
Related Questions
Ask questiHow does economic theory contribute to managerial decisions? on #Minimum 100 words accepted#

The Determination of the Value Money   Since money is primarily a medium of exchange, the value of money means what money will buy.  If at one time a certain amount of money

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

I. A farmer – businessman is in a quandary as to what crop to plant in his land. He has the option to plant Crop A, Crop B, or Crop C. f the weather turns out to be good and the

critically analysis the profit maximisation theory of business firm and illucidet the role of profit in business

Compensatory Financing Two other schemes for alleviating the effects of commodity trade instability have been operating for a number of years.  These are the IMF's Compensator

gap between economic theory and business practice

Q. Explain the Efficiency wage model? Efficiency wage models such as Shapiro and Stiglitz (1984) suggest wage rents as an addition to monitoring, because this gives employees a

Advertising expenditure must remain the same If advertising expenditure of a firm increases, consumers may be tempted to buy more of its product. Hence the advertising expendit

cvp analysis