Indifference Curves An indifference curve shows a set of consumption bundles among which the individual is indifferent Quantity of X Quantity of Y X1X1.
Axioms of Rational Choice Completeness If A and B are any two situations, an individual can always specify exactly one of these possibilities: A is preferred.
level of happiness or satisfaction associated with alternative choices a term referring to the satisfaction received by a consumer from consuming.
1 Chapter 3 PREFERENCES AND UTILITY Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.
Hypothesis: Workers of equal skill paid the same wage if workers are mobile Evidence: Wages differ One reason: Jobs differ in factors other than wage Good.
INDIFFERENCE CURVES. Warm-up Question What do dating and marriage have to do with economics? Scarcity Choice Utility maximization.
