The Individuality of Indifference Curves

Each person determines their own preferences and utility. Thus, while indifference curves have the same

general shape—they slope down, and the slope is steeper on the left and flatter on the right—the specific shape

of indifference curves can be different for every person. Figure B1, for example, applies only to Lilly’s

preferences. Indifference curves for other people would probably travel through different points.

Utility-Maximizing with Indifference Curves

People seek the highest level of utility, which means that they wish to be on the highest possible indifference

curve. However, people are limited by their budget constraints, which show what tradeoffs are actually

possible.

Maximizing Utility at the Highest Indifference Curve

Return to the situation of Lilly’s choice between paperback books and doughnuts. Say that books cost $6,
{"file_name": "Microeconomics3e.pdf", "upload_timestamp": "2026-02-07T15:37:44.339247", "source_file": "downloads\\business\\economics\\Microeconomics3e.pdf", "title": "Principles of Microeconomics 3e", "source": "downloads\\business\\economics\\Microeconomics3e.pdf", "file_hash": "830b81f41611ac67a490444dbb5d6aed292224606965b06965b914443c93331a", "moddate": "2022-12-07T14:23:05-06:00", "total_pages": 597, "file_type": ".pdf", "creationdate": "2022-12-07T14:15:44-06:00", "producer": "Prince 14.2 (www.princexml.com)", "creator": "PDFMiner", "uploaded_via": "batch_uploader", "file_size_mb": 26.99, "batch_upload": true}