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
Open Market Operations Open market operations is another traditional or quantitative weapon at the disposal of central bank to control the volume of aggregate bank credit in t

Airbus Boeing Demand P = 182.868 - 0.0003Q P = 198.6592 - 0.00013Q TVC Curve TVC = 104.8822Q - 0.001Q^2 + 0

PHILLIPS CURVE   The Phillips  curve,  named  after  A.  W.  Phillips,  describes  the  relationship between unemployment  and  inflation. In  1958  Phillips, then  professor a

The Multiplier In his theory Keynes asserted that consumption is a function of income, and so it follows that a change in investment, which we may call ΔI, meaning an incremen

Consider an economy with two individuals. Individual 1 has (inverse) demand curve for a public good given by P1=60-2Q1, While individual 2 has (inverse) demand curve for the public

cvp analysis

prepare a break-even analysis to determine volume required to cover costs with and without a specified profit target and price.

The owner of a patent has a contract with a cooperation that gives it right to use the patent. The cooperation will pay the patent owner $2500 yearly for the next 5 years, $3000 fo

The war on drugs is an expensive battle, as a great deal of resources go into catching those who buy or sell illegal drugs on the black market, prosecuting them in court, and housi