Preferences & indifference curves
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- Preferences & Indifference Curves Overview:
- Preference Maps & Indifference Curves
- Graph of a person's preference
- Combination of goods where consumer is indifferent
- A family of indifference curves
- Marginal Rate of Substitution
- Rate of giving up good y for good x
- Slope of the indifference curve
- Steep indifference curve → MRS is high
- Flat indifference curve → MRS is low
- Diminishing marginal rate of substitution
- Degree of Substitutability
- How close are the substitutes?
- Different shapes of indifference curves
- Ordinary Goods
- Perfect Substitutes
- Perfect Complements
- Understanding Indifference Curves & Marginal Rate of Substitution
Consider the following Indifference Curves:
- Consider the following Indifference Curves:
- Understanding Ordinary Goods, Perfect Substitutes, & Perfect Complements
Draw indifference curves for left shoes and right shoes.
- Draw indifference curves for instant coffee and coffee beans.
- Draw indifference curves for chocolate and vanilla.