Diminishing marginal utility MU falls as consumption rises. Calculate utility of all possible combinations and find the greatest. An Indifference Map is a representative sample of indifference curves. Indifference curves are convex to the origin. Indifference curves do not intersect.
Intersections violate transitivity.
The consumer's willingness to accept more of one good for less of another diminishes. Indifference Curve Analysis Can show consumer equilibrium using indifference curves budget line Indifference curves indicate satisfaction gained from alternative combinations Budget lines show costs of alternative combinations Equilibrium where utility is maximized given income constraint. Consumer equilibrium where an indifference curve is tangent to the budget line. Choices on higher indifference curves are not affordable. Other affordable choices are on lower indifference curves.