Answer to Question #84119 in Microeconomics for Nandy

Question

The characteristic feature of indifference curve is that it will not touch the X axis or Y axis. But as a special case it will touch the Y axis if the combination is between Money and Commodity. "If money is taken on Y-axis, then IC curve can touch oy-axis" here we have taken 'money' on Y-axis and 'commodity' on X-axis. Here my doubt is could we use indifference curve for one commodity? If so please explain me with an example.

Answer 1

a. An indifference curve can touch the Y axis or even the X axis. This is the case especially when the curve is derived using Commodity and Money on the axis.

b. The indifference curve can be used with one commodity. This means that the Y axis will be money and X axis will be the commodity.

This is explained in the following example: