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01a applying graphs to economics
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A practical-theoretical help for 1 years economics students
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An indifference curve shows combinations of goods and services between which a consumer is indifferent In other words, each combination on an indifference curve gives the consumer the same total satisfaction An indifference curve is normally drawn as convex to the origin This reflects the assumption of the law of diminishing marginal satisfaction / marginal utility I.e. as we consume extra units of something, the extra utility falls, total utility rises at a diminishing rate Combinations of products on an indifference curve further from the origin are assumed to give greater total utility
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