Is there a time with the indifferent curve, that a consumer won’t be equally happy? I find it hard to believe that the consumer will always be happy with “x” amount of one item and “x” amount of the other. I could be very wrong, but was wondering if there are any times when this is the case?
I think that the indifferent curve is a great way to view your options when you have a budget constraint. The curve shows at what points the person will be satisfied with two items, and how many of each item they will receive. The marginal rate of substitution also shows how many of one item someone is willing to give up to have “x” number of another item.Indifferent curves go to show more how the demand curve works. With the indifferent curve, if someone demands more of an item the indifferent curve will show how they will then receive less of another item. Having learned more about indifferent curves, I can look more at my own life and see how I give up one item for another. I am constantly facing trade-offs. I just sold my snowmobile and trailer, to use that money to start my business back up. My trade-off was not being able to snowmobile anymore so that I had cash flow to buy more equipment for my company. The indifferent curve will always be in the back of my head when I make purchases now. I will always think, what am I giving up having less of by making this purchase? Even a small purchase such as, buying a pack of red bulls at the grocery store. If I were to not buy the red bulls, maybe I would treat myself to a coffee out one morning.
I think as humans it is hard for us to visualize how a bunch of small purchases could add up to that large purchase. Also, many people do not have the delayed gratification to wait to save the money for the large purchase. People like the buy then and now, instead of waiting.
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