This is known as the law of diminishing marginal utility. For instance, a thirsty person would derive more utility from the first glass of water than the successive ones. Properties of Indifference Curves 1. All points on the same indifference curve carry same level of satisfaction or utility. A point with higher level of utility will be on a higher indifference curve while a point with lower level of satisfaction will be on a lower indifference curve.
Indifference curves slope downward.
In order to get more of one good, one has to give up some amount of the other. Indifference curves do not intersect each other. The marginal rate of substitution is the rate at which the consumer is just willing to substitute one good for another. The marginal rate of substitution is in fact the slope of the indifference curve. The steeper the indifference curve is, higher would be the slope and so higher would be the marginal rate of substitution of X for Y. 5.