Applications of Indifference Curve

The indifference curve approach can be used to get the solution to the problems of the real world. It can be used to evaluate government policies, e.g., taxation, subsidy and rationing policies, determine the gain from the exchange of commodities between individuals, sectors and countries, derivation of the labour supply curve, indexing cost of living, etc.

Hence, in this, we will demonstrate the applications of the indifference curve technique to some real-world problems. These are as follows:

1. Measuring Effects of Income & Excise Taxes and Income & Excise Subsidies

2. Normal Goods: Income & Substitution Effects

3. Inferior Goods: Income & Substitution Effects

4. Giffen Paradox or Giffen Goods: Income & Substitution Effects

Read More- Microeconomics

  1. Microeconomics: Definition, Meaning and Scope
  2. Methods of Analysis in Economics
  3. Problem of Choice & Production Possibility Curve
  4. Concept of Market & Market Mechanism in Economics
  5. Concept of Demand and Supply in Economics
  6. Concept of Equilibrium & Dis-equilibrium in Economics
  7. Cardinal Utility Theory: Concept, Assumptions, Equilibrium & Drawbacks
  8. Ordinal Utility Theory: Meaning & Assumptions
  9. Indifference Curve: Concept, Properties & Shapes
  10. Budget Line: Concept & Explanation
  11. Consumer Equilibrium: Ordinal Approach, Income & Price Consumption Curve
  12. Applications of Indifference Curve
  13. Measuring Effects of Income & Excise Taxes and Income & Excise Subsidies
  14. Normal Goods: Income & Substitution Effects
  15. Inferior Goods: Income & Substitution Effects
  16. Giffen Paradox or Giffen Goods: Income & Substitution Effects
  17. Concept of Elasticity: Demand & Supply
  18. Demand Elasticity: Price Elasticity, Income Elasticity & Cross Elasticity
  19. Determinants of Price Elasticity of Demand
  20. Measuring Price Elasticity of Demand
  21. Price Elasticity of Supply and Its Determinants
  22. Revealed Preference Theory of Samuelson: Concept, Assumptions & Explanation
  23. Hicks’s Revision of Demand Theory
  24. Choice Involving Risk and Uncertainty
  25. Inter Temporal Choice: Budget Constraint & Consumer Preferences
  26. Theories in Demand Analysis
  27. Elementary Theory of Price Determination: Demand, Supply & Equilibrium Price
  28. Cobweb Model: Concept, Theorem and Lagged Adjustments in Interrelated Markets
  29. Production Function: Concept, Assumptions & Law of Diminishing Return
  30. Isoquant: Assumptions and Properties
  31. Isoquant Map and Economic Region of Production
  32. Elasticity of Technical Substitution
  33. Law of Returns to Scale
  34. Production Function and Returns to Scale
  35. Euler’s Theorem and Product Exhaustion Theorem
  36. Technical Progress (Production Function)
  37. Multi-Product Firm and Production Possibility Curve
  38. Concept of Production Function
  39. Cobb Douglas Production Function
  40. CES Production Function
  41. VES Production Function
  42. Translog Production Function
  43. Concepts of Costs: Private, Social, Explicit, Implicit and Opportunity
  44. Traditional Theory of Costs: Short Run
  45. Traditional Theory of Costs: Long Run
  46. Modern Theory Of Cost: Short-run and Long-run
  47. Modern Theory Of Cost: Short Run
  48. Modern Theory Of Cost: Long Run
  49. Empirical Evidences on the Shape of Cost Curves
  50. Derivation of Short-Run Average and Marginal Cost Curves From Total Cost Curves
  51. Cost Curves In The Long-Run: LRAC and LRMC
  52. Economies of Scope
  53. The Learning Curve
  54. Perfect Competition: Meaning and Assumptions
  55. Perfect Competition: Pricing and Output Decisions
  56. Perfect Competition: Demand Curve
  57. Perfect Competition Equilibrium: Short Run and Long Run
  58. Monopoly: Meaning, Characteristics and Equilibrium (Short-run & Long-run)
  59. Multi-Plant Monopoly
  60. Deadweight Loss in Monopoly
  61. Welfare Aspects of Monopoly
  62. Price Discrimination under Monopoly: Types, Degree and Equilibrium
  63. Monopolistic Competition: Concept, Characteristics and Criticism
  64. Excess Capacity: Concept and Explanation
  65. Difference Between Perfect Competition and Monopolistic Competition
  66. Oligopoly Market: Concept, Types and Characteristics
  67. Difference Between Oligopoly Market and Monopolistic Market
  68. Oligopoly: Collusive Models- Cartel & Price Leadership
  69. Oligopoly: Non-Collusive Models- Cournot, Stackelberg, Bertrand, Sweezy or Kinked Demand Curve
  70. Monopsony Market Structure
  71. Bilateral Monopoly Market Structure
  72. Workable Competition in Market: Meaning and Explanation
  73. Baumol’s Sales Revenue Maximization Model
  74. Williamson’s Model of Managerial Discretion
  75. Robin Marris Model of Managerial Enterprise
  76. Hall and Hitch Full Cost Pricing Theory
  77. Andrew’s Full Cost Pricing Theory
  78. Bain’s Model of Limit Pricing
  79. Sylos Labini’s Model of Limit Pricing
  80. Behavioural Theory of Cyert and March
  81. Game Theory: Concept, Application, and Example
  82. Prisoner’s Dilemma: Concept and Example

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