- We can determine the quantity of two goods to be purchased using the Budget line and the optical

curve:

+ An indifference curve is a line that shows different combinations of two goods that provide the same
utility or satisfaction, and so when choosing, consumers are "indifferent", i.e. indifferent or consider
these combinations to be indifferent. goods are the same. The indifference curve is usually assumed to
be convex ( convex shape )

• The indifference curve is a downward sloping line moving from left to right.

• When representing the preferences of the same consumer, different indifference curves will never
intersect.

• The indifference curve tends to gradually ease when moving from left to right.

• Starting from the origin, the further you go out, the higher the utility that the indifference curve
represents

+The budget line will show different combinations in which consumers can consume the two goods

• Once a certain amount of x has been purchased, the maximum amount of y can be buy is the amount
of income I left after buying x divided by the price PY:

• The maximum set of baskets (x,y) here must satisfy the equality or equation:

 The indifference curve is used together with the budget line to determine consumer demand for
two goods and to analyze the effect of their relative price changes on the quantity demanded.