There is a general procedure for constructing indifference curves given a “verbal” description of the preferences. First plop your pencil down on the graph at some consumption bundle (x1, x2). Now think about giving a little more of good 1, Δx1, to the consumer, moving him to (x1 +Δx1, x2). Now ask yourself how would you have to change the consumption of x2 to make the consumer indifferent to the original consumption point? Call this change Δx2. Ask yourself the question “For a given change in good 1, how does good 2 have to change to make the consumer just indifferent between (x1 + Δx1, x2 + Δx2) and (x1, x2)?” Once you have determined this movement at one consumption bundle you have drawn a piece of the indifference curve. Now try it at another bundle, and so on, until you develop a clear picture of the overall shape of the indifference curves.There is a general procedure for constructing indifference curves given a “verbal” description of the preferences. First plop your pencil down on the graph at some consumption bundle (x1, x2). Now think about giving a little more of good 1, Δx1, to the consumer, moving him to (x1 +Δx1, x2). Now ask yourself how would you have to change the consumption of x2 to make the consumer indifferent to the original consumption point? Call this change Δx2. Ask yourself the question “For a given change in good 1, how does good 2 have to change to make the consumer just indifferent between (x1 + Δx1, x2 + Δx2) and (x1, x2)?” Once you have determined this movement at one consumption bundle you have drawn a piece of the indifference curve. Now try it at another bundle, and so on, until you develop a clear picture of the overall shape of the indifference curves.
Question
There is a general procedure for constructing indifference curves given a “verbal” description of the preferences. First plop your pencil down on the graph at some consumption bundle (x1, x2). Now think about giving a little more of good 1, Δx1, to the consumer, moving him to (x1 +Δx1, x2). Now ask yourself how would you have to change the consumption of x2 to make the consumer indifferent to the original consumption point? Call this change Δx2. Ask yourself the question “For a given change in good 1, how does good 2 have to change to make the consumer just indifferent between (x1 + Δx1, x2 + Δx2) and (x1, x2)?” Once you have determined this movement at one consumption bundle you have drawn a piece of the indifference curve. Now try it at another bundle, and so on, until you develop a clear picture of the overall shape of the indifference curves.There is a general procedure for constructing indifference curves given a “verbal” description of the preferences. First plop your pencil down on the graph at some consumption bundle (x1, x2). Now think about giving a little more of good 1, Δx1, to the consumer, moving him to (x1 +Δx1, x2). Now ask yourself how would you have to change the consumption of x2 to make the consumer indifferent to the original consumption point? Call this change Δx2. Ask yourself the question “For a given change in good 1, how does good 2 have to change to make the consumer just indifferent between (x1 + Δx1, x2 + Δx2) and (x1, x2)?” Once you have determined this movement at one consumption bundle you have drawn a piece of the indifference curve. Now try it at another bundle, and so on, until you develop a clear picture of the overall shape of the indifference curves.
Solution
Sure, here is the step-by-step process to construct indifference curves:
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Start by choosing a point on the graph that represents a consumption bundle, let's call this point (x1, x2). This is where you "plop your pencil down".
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Consider giving the consumer a little more of good 1. This change in the quantity of good 1 is represented as Δx1. This moves the consumer to a new point on the graph, (x1 + Δx1, x2).
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Now, think about how the consumption of good 2 would need to change to make the consumer indifferent between the new consumption bundle and the original one. This change in the quantity of good 2 is represented as Δx2.
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The key question to ask yourself is: "For a given change in good 1, how does good 2 have to change to make the consumer just indifferent between (x1 + Δx1, x2 + Δx2) and (x1, x2)?"
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Once you've determined this, you've drawn a piece of the indifference curve.
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Repeat this process with different consumption bundles until you have a clear picture of the overall shape of the indifference curves.
Remember, indifference curves represent all the consumption bundles that a consumer views as equally preferable. The shape of these curves can tell you a lot about the consumer's preferences.
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