Lectures in Microeconomics-Charles W. Upton Composite Goods.
Lectures in Microeconomics-Charles W. Upton Indifference Curves.
19
Lectures in Microeconomics-Charles W. Upton Indifference Curves
-
date post
19-Dec-2015 -
Category
Documents
-
view
221 -
download
0
Transcript of Lectures in Microeconomics-Charles W. Upton Indifference Curves.
Indifference Curves
Utility Functions
• If U(A1,B1) > U(A2,B2)
(A1,B1) is preferred to (A2,B2)
• If U(A1,B1) = U(A2,B2)
The consumer is indifferent between(A1,B1) & (A2,B2)
Indifference Curves
Utility Functions
• (A1,B1) is preferred to (A2,B2)
– Then U(A1,B1) > U(A2,B2)
• The consumer is indifferent between(A1,B1) & (A2,B2)
– Then U(A1,B1) = U(A2,B2)
Indifference Curves
Combinations of A & BA
B
We represent an individual’s preferences with indifference curves,
plots of points representing equal utility