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  • Shape of an Indifference Curve

Convex Preferences

A person is described as having convex preferences if their indifference curves are convex, meaning they bow inwards towards the origin. This shape, which becomes progressively flatter when moving to the right, reflects a diminishing marginal rate of substitution (MRS). The underlying reason is that when an individual has an abundance of one good compared to another, they are more willing to trade a larger amount of the abundant good for a single unit of the scarcer good. As a result, the MRS—the absolute value of the indifference curve's slope—declines as one moves along the curve. This preference structure also means that an individual will prefer a 'mixture' or a weighted average of two bundles over either of the original bundles, if both provide the same utility.

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References

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Economics

Introduction to Microeconomics Course

The Economy 2.0 Microeconomics @ CORE Econ

Ch.3 Doing the best you can: Scarcity, wellbeing, and working hours - The Economy 2.0 Microeconomics @ CORE Econ

Ch.5 The rules of the game: Who gets what and why - The Economy 2.0 Microeconomics @ CORE Econ

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