# Preferences & indifference curves

##### Intros
###### Lessons
1. Preferences & Indifference Curves Overview:
2. Preference Maps & Indifference Curves
• Graph of a person's preference
• Combination of goods where consumer is indifferent
• A family of indifference curves
3. 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
4. Degree of Substitutability
• How close are the substitutes?
• Different shapes of indifference curves
• Ordinary Goods
• Perfect Substitutes
• Perfect Complements
##### Examples
###### Lessons
1. Understanding Indifference Curves & Marginal Rate of Substitution
Consider the following Indifference Curves:
1. If a consumer chooses 2 pizzas and 2 sodas, what is the marginal rate of substitution?
2. If a consumer chooses 3 pizzas and 3 sodas, what is the marginal rate of substitution?
3. Does the law of diminishing marginal rate of substitution apply?
2. Consider the following Indifference Curves:
1. If a consumer chooses 1 book and 2 movies, what is the marginal rate of substitution?
2. If a consumer chooses 1 book and 5 movies, what is the marginal rate of substitution?
3. Does the law of diminishing marginal rate of substitution apply?
3. Understanding Ordinary Goods, Perfect Substitutes, & Perfect Complements
Draw indifference curves for left shoes and right shoes.
1. Draw indifference curves for instant coffee and coffee beans.
1. Draw indifference curves for chocolate and vanilla.