Indifference curves and budget constraints

Question

Derive a demand curve for a product by showing (drawing a graph) what happens as the price of a good falls. Prove that indifference curves cannot cross. Graph the income and substitution effects for an inferior good when one price falls.

Answer 1

indifference curves by definition represent equal levels of consumer satisfaction.

the consumer is "indifferent" between combinations of goods on the curve

like the donkey unable to decide which bale of hey to eat, so he starves to death contemplating the 2 choices.

If two curves intersected, that would mean that intersection point represented 2 different levels of satisfaction to the consumer, and simultaneously 2 equal levels of satisfaction. Which is a contradiction.

It's usually a microeconomic indifference curve, but it's been used in macro too, with a tradeoff between guns and butter or food and military expensitures.

where an indifference curve is tangent to a budget constraint is the optimal choice, for the individual consumer or for society as a whole or the government.