Why does an indifference curve slope downward and why is it bowed toward the origin?
The correct answer and explanation is :
Correct Answer:
An indifference curve slopes downward and is bowed toward the origin due to the principles of marginal rate of substitution (MRS) and diminishing marginal utility.
300-Word Explanation:
An indifference curve represents all combinations of two goods that give a consumer the same level of satisfaction or utility. The curve slopes downward from left to right because if a consumer wants more of one good, they must give up some of the other to maintain the same level of utility. This trade-off reflects the marginal rate of substitution (MRS)—the rate at which a consumer is willing to substitute one good for another while keeping utility constant. If the curve sloped upward, it would imply that a consumer could gain more of both goods and still have the same satisfaction, which contradicts the basic idea of utility maximization.
The indifference curve is bowed toward the origin (convex to the origin) because of the law of diminishing marginal rate of substitution. As a consumer consumes more of good X and less of good Y, the willingness to give up units of Y to gain an additional unit of X decreases. This happens due to diminishing marginal utility—the more you have of one good, the less additional satisfaction you get from consuming even more of it. Hence, consumers are less willing to trade large amounts of Y for X as they get more X, which makes the curve flatten out as it moves to the right.
This curvature reflects a preference for balanced combinations of the two goods rather than extreme amounts of one and very little of the other. In short, the downward slope shows the trade-off (more of one good means less of the other), and the bowing toward the origin shows that the rate at which consumers are willing to make that trade-off decreases as they consume more of one good.