Understanding the Infeasibility of Thick Indifference Curves in Microeconomic Theory

Indifference curves are a fundamental concept in microeconomic theory, representing the various combinations of goods that provide a consumer with the same level of utility. However, thick indifference curves, which suggest that multiple combinations of goods yield the same utility, are not possible due to the basic assumptions of consumer preferences. This article delves into the reasons behind this impossibility, including monotonic preferences, transitivity of preferences, and the diminishing marginal rate of substitution. Additionally, it explores the utility representation in economic theory and how thick curves would lead to contradictions in consumer behavior.

Monotonic Preferences

Indifference curves are based on the concept that a consumer prefers more of at least one good without losing any amount of another good. This is known as monotonic preferences. A thick indifference curve would imply that there are multiple combinations of goods that yield the same utility level, contradicting the idea of monotonic preferences. For instance, if a consumer can get equal satisfaction from a combination of 10 apples and 5 bananas or 15 apples and 2 bananas, it would defy the fundamental principle that more of a preferred good is preferred to less.

Transitivity of Preferences

The transitivity assumption states that if a consumer prefers A to B, and B to C, then they must prefer A to C. A thick indifference curve would create inconsistencies in preference rankings. For example, if a consumer is indifferent between points A and B on a thick curve, and point B is preferred to point C on a thinner curve, it would lead to a logical inconsistency. This contradiction would arise because the consumer would need to rank the points in a manner that neither prefers A over C nor vice versa, which is not possible within the logical framework of economic theory.

Diminishing Marginal Rate of Substitution

Indifference curves are typically convex to the origin, reflecting the principle of the diminishing marginal rate of substitution (MRS). This principle states that as one good is substituted for another, the amount of the second good that is needed to maintain the same level of satisfaction decreases. A thick curve would imply that the MRS is constant or increasing, suggesting that consumers would be indifferent between a wider range of good combinations than is realistic. This would contradict the foundational concept of diminishing MRS, which is supported by empirical evidence and economic theory.

Utility Representation

Utility theory posits that each point on an indifference curve corresponds to a specific level of utility. A thick curve would imply that there is a range of utility levels for a given combination of goods, which is inconsistent with the idea that utility is a single-valued function of consumption bundles. This violates the principle that a consumer's utility from a combination of goods is uniquely determined. The single-valued nature of utility is essential for creating a coherent framework for analyzing consumer behavior and economic decision-making.

Related Considerations

It's worth noting that while thick indifference curves are infeasible, the concept of consumer choice allows for the possibility of an irrational consumer who may choose combinations of goods that provide less satisfaction despite being able to afford more. For instance, a consumer might opt for 7 of good X and just 3 of good Y, even though they could afford a more satisfying combination. This irrationality is captured within the broader framework of indifference curve analysis, which acknowledges both rational and irrational consumer behavior.

As a graphical illustration, consider the following scenario:

A graphic illustrating the concept where a rational consumer would choose the combination of 7 of X and 15 of Y, while an irrational consumer might choose 7 of X and just 3 of Y, despite the latter being less satisfactory.

In summary, thick indifference curves contradict the basic assumptions of rational consumer behavior, leading to inconsistencies in preference and utility representation. This makes them infeasible within the broader framework of microeconomic theory.