Step ➊ : Define 'indifference curve' in the introduction.

An indifference curve shows all combinations of goods that provide an equal level of utility or satisfaction. Three important features of the indifference curves is that they are usually drawn convex to the origin, are downward sloping and do not cross each other.


Step ➋ : Explain why indifference curves are convex to the origin.

The indifference curve is convex to the origin due to the concept of the diminishing marginal rate of substitution between two goods. The marginal rate of substitution is the rate at which a consumer is willing to substitute one good for another.

In the diagram below, the indifference curve slope more steeply from left to right. This shows that when consuming large amounts of good A, the consumer is willing to give up rather more of this good when consumption of good B is small. The rate at which the consumer is willing to substitute one good for another in this way is known as the marginal rate of substitution