Suppose my preferences are such that I like more of both goods, but only up to a point. After I have 5 units of both goods, that’s as good as it gets, and I’m indifferent if I get more. how do u draw the indifference curves? it seems that any bundle with more than five units of both goods are the same, so any line in that area is useless
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3$\begingroup$ Perhaps the "curve" is not a line, but an area then? $\endgroup$– GiskardCommented Sep 28, 2020 at 5:32
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2 Answers
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The area from $(0, 0)$ to $(5, 5)$ would be just like any other two-good indifference curve. Then since the area $\{(x, y): x \geq 5, y \geq 5\}$ has the same utility, they're all on the same "indifference curve" (so that's more like an "indifference area").
Not sure what the indifference curves would look like, say, at $(80, 2)$ though since you didn't specify if that's better or worse than $(5, 5)$.
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This is an example of a satiation point or bliss point. Basically you want a particular point and getting further away from this point decreases your utility. The indifference curves look like concentric circles around a specific point, in your case (5,5) is the bliss point.
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$\begingroup$ I think the bliss point is a different situation, in this question the point (5,5) is indifferent to the point (6,6). as more isn't better in this situation. But in a bliss point case, more is actually worse as u get away from your bliss point, so the point (6,6) would be worse than (5,5) $\endgroup$– MeganCommented Oct 2, 2020 at 5:07