Leisure-Consumption indifference curves

Question

Quizplus · Accepted Answer

Leisure-consumption indifference curves show the different combinations of leisure and consumption that yield the same level of satisfaction or utility for an individual. The curves slope upward because an increase in consumption (goods and services) requires a decrease in leisure time. The curves are convex because the marginal utility of leisure tends to decrease as leisure time increases, while the marginal utility of consumption tends to decrease as the level of consumption increases. This means that individuals are willing to give up more leisure time for small increases in consumption when they have lower levels of consumption, but as consumption increases, the amount of leisure time required to give up to obtain the same additional consumption becomes larger.

Leisure-Consumption Indifference Curves