Scribd Logo
Upload

Welcome to Scribd!

  • Examples of Indifference Curves

    Uploaded by

    tamerlana
    2K views5 pages
    I don't care whether you have coke(r) or pepsi(r), as long as it is cola. This is a case we discussed earlier: perfect substitutes. - w.c. Fields was a movie actor with a legendary drinking problem. - Carrie Nation was a prominent leader in the temperance movement.

    Original Description:

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    I don't care whether you have coke(r) or pepsi(r), as long as it is cola. This is a case we discussed earlier: perfect substitutes. - w.c. Fields was a movie actor with a legendary drinking problem. - Carrie Nation was a prominent leader in the temperance movement.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    2K views5 pages

    Examples of Indifference Curves

    Uploaded by

    tamerlana
    I don't care whether you have coke(r) or pepsi(r), as long as it is cola. This is a case we discussed earlier: perfect substitutes. - w.c. Fields was a movie actor with a legendary drinking problem. - Carrie Nation was a prominent leader in the temperance movement.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    of 5

    Three Examples

    • We are going to do some special cases to


    Examples of Indifference Curves illustrate how some special indifference
    curves look.

    Lectures in Microeconomics-Charles W. Upton Examples of Indifference


    Curves

    Coke® or Pepsi® Coke® or Pepsi®


    • I don’t care whether you have Coke® or • I don’t care whether you have Coke® or
    Pepsi®, as long as it is cola. Pepsi®, as long as it is cola.
    • This is a case we discussed earlier: perfect
    substitutes.

    Examples of Indifference Examples of Indifference


    Curves Curves

    Coke
    Coke and Pepsi Coke
    Coke and Pepsi

    5 4 5 4
    7 3 7 3
    8 8
    2 \ 2 \

    1 6 1 6

    Examples of Indifference
    Pepsi Examples of Indifference
    Pepsi
    Curves Curves

    1
    Coke
    Coke and Pepsi Coke
    Coke and Pepsi

    5 4 5 4
    I2
    7 3 7 3
    I1 8 I1 8
    2 \ 2 \

    1 6 1 6

    Examples of Indifference
    Pepsi Examples of Indifference
    Pepsi
    Curves Curves

    Coke
    Coke and Pepsi Left and Right Shoes
    • Perfect Complements

    I3
    5 4
    I2
    7 3
    I1 8
    2 \

    1 6

    Examples of Indifference
    Pepsi Examples of Indifference
    Curves Curves

    Right
    Left and Right Shoes Right
    Left and Right Shoes
    Shoes Shoes

    5 4 5 4
    7 3 7 3
    8 8
    2 \ 2 \

    1 6 1 6 I1
    Left Left
    Examples of Indifference Examples of Indifference
    Curves Shoes Curves Shoes

    2
    Right
    Left and Right Shoes Right
    Left and Right Shoes
    Shoes Shoes

    5 4 5 4
    7 3 7 3 I3
    8 8
    2 \ I2 2 \ I2

    1 6 I1 1 6 I1
    Left Left
    Examples of Indifference Examples of Indifference
    Curves Shoes Curves Shoes

    Third Example Third Example


    • Indifference curves between Bourbon and • Indifference curves between Bourbon and
    Temperance Lectures for W.C. Fields and Temperance Lectures for W.C. Fields and
    Carrie Nation. Carrie Nation.
    – W. C. Fields was a movie actor with a
    legendary drinking problem.

    Examples of Indifference Examples of Indifference


    Curves Curves

    Third Example Bourbon


    W. C. Fields
    • Indifference curves between Bourbon and
    Temperance Lectures for W.C. Fields and
    Carrie Nation.
    – W. C. Fields was a movie actor with a 5 4 I4
    legendary drinking problem. 7 3 I3
    – Carrie Nation was a prominent leader in the
    temperance movement. 2\ 8 I2
    6 I1 Temperance
    1
    Lectures
    Examples of Indifference Examples of Indifference
    Curves Curves

    3
    Bourbon
    Carrie Nation Apples and Bananas
    I1 I2 I3 I4
    • I like apples and bananas. If you cut the
    number of apples in half and double the
    number of bananas, I am just as well off.
    5 4
    7 3
    2\ 8 Temperance
    1 6 Lectures
    Examples of Indifference Examples of Indifference
    Curves Curves

    Apples and Bananas Apples and Bananas


    • I like apples and bananas. If you cut the • I like apples and bananas. If you cut the
    number of apples in half and double the number of apples in half and double the
    number of bananas, I am just as well off. number of bananas, I am just as well off.
    • This is a more standard case. • This is a more standard case.
    • It actually corresponds to U(A, B) = AB

    Examples of Indifference Examples of Indifference


    Curves Curves

    Apples and Bananas A


    Apples and Bananas
    • I like apples and bananas. If you cut the
    number of apples in half and double the
    number of bananas, I am just as well off.
    • This is a more standard case. 5 4
    • It actually corresponds to U(A, B) = AB 7 3
    • To see this, note that 2\ 8
    (0.5A)(2B) = AB. 1 6
    Examples of Indifference Examples of Indifference
    I1 B
    Curves Curves

    4
    A
    Apples and Bananas A
    Apples and Bananas

    5 4 5 4
    7 3 7 3 I3
    2\ 8 2\ 8
    I2 I2
    1 6 1 6
    Examples of Indifference
    I1 B Examples of Indifference
    I1 B
    Curves Curves

    More to Come
    • Done
    – The Basic Model of Utility Maximization End
    – Some Applications to Indifference Curve
    • We continue this topic in the next lecture.
    ©2004 Charles
    W. Upton

    Examples of Indifference Examples of Indifference


    Curves Curves

    You might also like