Indifference Curve Drawing Tips

Okay after seeing some dear in the headlights looks from last night, I am posting my tips for how to draw indifference curves and solve problems that seem to be real buggars (yeah, that's a technical term.)

Some students have trouble getting their minds around the concepts of indifference curves. Because these concepts are abstract, this makes solving word problems a bit taxing. No problem, help is on the way.

The SET-UP. Setting up the problem is 90% of the solution. Here are a few tips to Set Up correctly.

1. Draw and label the axis first.
2. Draw the first budget constraint line.
3. Stop. Get a cup of coffee or tea and ponder what you just drew.
4. Read the problem again.
NOTICE YOU HAVE YET TO DRAW A CURVE! AHA, THAT IS THE TRICK.

5. Consider if you can draw another budget constraint line next or if you need to draw your first Indifference curve. Save the Indifference curves for last if possible.
6. Slowly (and in pencil lightly) draw your first indifference curve mirroring the shape in your text. See, that wasn't so bad.
7. Stop. Ponder what you just drew. Not bad, eh?
8. Once you have your first indifference curve drawn, pencil in the dotted lines from the tangent point to the vertical and horizontal axis.
9. Label these points on the axis. Consider using numbers for quantities.
10. Draw your next Budget Constraint line.
11. Stop. Ponder what you just drew.
12. Read the problem again. Evaluate if you drew the last Budget line where it needs to be.
At this point you are in a position to put the last indifference curve into the graph.

So the Key is to Go SLOW in the Set up and save the indifference curves for last if possible, rather than your gut instinct of drawing that first.

The position of the last Indifference curve is usually the solution to most word problems.

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