Analyze the properties of indifference curves in consumer theory. Why do standard indifference curves slope downward from left to right?

💡 Solution & Explanation

Indifference curves slope downward because satisfying the assumption of monotonicity implies that if a consumer has more of commodity one, they must have less of commodity two to maintain the exact same level of utility. The slope represents the marginal rate of substitution, which diminishes as the consumer moves down the curve. Concurrently, indifference curves cannot intersect because intersection would violate the transitivity axiom of rational consumer preferences. Consumer equilibrium occurs where the budget line is tangent to the highest attainable indifference curve.