Figure 6A-1 Hugh’s Indifference Curve
6A.1 Indifference Curves
Suppose Hugh currently has available some specific bundle of goods, say,
18 units of clothing and 10 units of food. Now offer him an alternative
bundle of, say, 13 units of clothing and 15 units of food. This alternative
combination of goods has 5 fewer units of clothing and 5 more units of
food than the first one. Whether Hugh prefers this new bundle depends
on the relative valuation that he places on 5 more units of food and 5
fewer units of clothing. If he values the extra food more than the forgone
clothing, he will prefer the new bundle to the original one. If he values
the extra food less than the forgone clothing, he will prefer the original
bundle. If Hugh values the extra food the same as the forgone clothing,
he is said to be indifferent between the two bundles.
Suppose that after much trial and error, we have identified several
bundles between which Hugh is indifferent. In other words, all bundles
give him equal satisfaction or utility. They are shown in the table in
Figure 6A-1.