Thursday, February 05, 2009
Is there a meaning to the area under the IDC?
I am teaching Intermediate Microeconomics this semester and yesterday in class we were talking about Indifference curves. While we wee discussing the different combinations of the two commodities along the same indifference curve, one of my students asked me if the area under the rectangle has any significance. To the best of my knowledge the area under the indifference curve which mathematically is the product of the quantities of the two commodities in utility space does not have a special significance. Do any of you know otherwise?