Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves.
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Transcript of Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves.
![Page 1: Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves.](https://reader031.fdocuments.us/reader031/viewer/2022013011/55180386550346c6568b52b2/html5/thumbnails/1.jpg)
Lectures in Microeconomics-Charles W. Upton
Examples of Indifference Curves
![Page 2: Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves.](https://reader031.fdocuments.us/reader031/viewer/2022013011/55180386550346c6568b52b2/html5/thumbnails/2.jpg)
Examples of Indifference Curves
Three Examples
• We are going to do some special cases to illustrate how some special indifference curves look.
![Page 3: Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves.](https://reader031.fdocuments.us/reader031/viewer/2022013011/55180386550346c6568b52b2/html5/thumbnails/3.jpg)
Examples of Indifference Curves
Coke® or Pepsi®
• I don’t care whether you have Coke® or Pepsi®, as long as it is cola.
![Page 4: Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves.](https://reader031.fdocuments.us/reader031/viewer/2022013011/55180386550346c6568b52b2/html5/thumbnails/4.jpg)
Examples of Indifference Curves
Coke® or Pepsi®
• I don’t care whether you have Coke® or Pepsi®, as long as it is cola.
• This is a case we discussed earlier: perfect substitutes.
![Page 5: Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves.](https://reader031.fdocuments.us/reader031/viewer/2022013011/55180386550346c6568b52b2/html5/thumbnails/5.jpg)
Examples of Indifference Curves
Coke and Pepsi
\
Coke
Pepsi
1
5
7
2
4
3
8
6
![Page 6: Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves.](https://reader031.fdocuments.us/reader031/viewer/2022013011/55180386550346c6568b52b2/html5/thumbnails/6.jpg)
Examples of Indifference Curves
Coke and Pepsi
\
Coke
Pepsi
1
5
7
2
4
3
8
6
![Page 7: Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves.](https://reader031.fdocuments.us/reader031/viewer/2022013011/55180386550346c6568b52b2/html5/thumbnails/7.jpg)
Examples of Indifference Curves
Coke and Pepsi
\
Coke
Pepsi
1
5
7
2
4
3
8
6
I1
![Page 8: Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves.](https://reader031.fdocuments.us/reader031/viewer/2022013011/55180386550346c6568b52b2/html5/thumbnails/8.jpg)
Examples of Indifference Curves
Coke and Pepsi
\
Coke
Pepsi
1
5
7
2
4
3
8
6
I1
I2
![Page 9: Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves.](https://reader031.fdocuments.us/reader031/viewer/2022013011/55180386550346c6568b52b2/html5/thumbnails/9.jpg)
Examples of Indifference Curves
Coke and Pepsi
\
Coke
Pepsi
1
5
7
2
4
3
8
6
I1
I2
I3
![Page 10: Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves.](https://reader031.fdocuments.us/reader031/viewer/2022013011/55180386550346c6568b52b2/html5/thumbnails/10.jpg)
Examples of Indifference Curves
Left and Right Shoes
• Perfect Complements
![Page 11: Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves.](https://reader031.fdocuments.us/reader031/viewer/2022013011/55180386550346c6568b52b2/html5/thumbnails/11.jpg)
Examples of Indifference Curves
Left and Right Shoes
\
Right Shoes
Left Shoes
1
5
7
2
4
3
8
6
![Page 12: Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves.](https://reader031.fdocuments.us/reader031/viewer/2022013011/55180386550346c6568b52b2/html5/thumbnails/12.jpg)
Examples of Indifference Curves
Left and Right Shoes
\
Right Shoes
Left Shoes
1
5
7
2
4
3
8
6 I1
![Page 13: Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves.](https://reader031.fdocuments.us/reader031/viewer/2022013011/55180386550346c6568b52b2/html5/thumbnails/13.jpg)
Examples of Indifference Curves
Left and Right Shoes
\
Right Shoes
Left Shoes
1
5
7
2
4
3
8
6 I1
I2
![Page 14: Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves.](https://reader031.fdocuments.us/reader031/viewer/2022013011/55180386550346c6568b52b2/html5/thumbnails/14.jpg)
Examples of Indifference Curves
Left and Right Shoes
\
Right Shoes
Left Shoes
1
5
7
2
4
3
8
6 I1
I2
I3
![Page 15: Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves.](https://reader031.fdocuments.us/reader031/viewer/2022013011/55180386550346c6568b52b2/html5/thumbnails/15.jpg)
Examples of Indifference Curves
Third Example
• Indifference curves between Bourbon and Temperance Lectures for W.C. Fields and Carrie Nation.
![Page 16: Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves.](https://reader031.fdocuments.us/reader031/viewer/2022013011/55180386550346c6568b52b2/html5/thumbnails/16.jpg)
Examples of Indifference Curves
Third Example
• Indifference curves between Bourbon and Temperance Lectures for W.C. Fields and Carrie Nation.– W. C. Fields was a movie actor with a
legendary drinking problem.
![Page 17: Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves.](https://reader031.fdocuments.us/reader031/viewer/2022013011/55180386550346c6568b52b2/html5/thumbnails/17.jpg)
Examples of Indifference Curves
Third Example
• Indifference curves between Bourbon and Temperance Lectures for W.C. Fields and Carrie Nation.– W. C. Fields was a movie actor with a
legendary drinking problem.– Carrie Nation was a prominent leader in the
temperance movement.
![Page 18: Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves.](https://reader031.fdocuments.us/reader031/viewer/2022013011/55180386550346c6568b52b2/html5/thumbnails/18.jpg)
Examples of Indifference Curves
W. C. Fields
\
Bourbon
Temperance Lectures
1
5
7
2
4
3
8
6 I1
I2
I3
I4
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Examples of Indifference Curves
Carrie Nation
\
Bourbon
Temperance Lectures1
57
2
4
38
6
I1 I2 I3 I4
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Examples of Indifference Curves
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.
![Page 21: Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves.](https://reader031.fdocuments.us/reader031/viewer/2022013011/55180386550346c6568b52b2/html5/thumbnails/21.jpg)
Examples of Indifference Curves
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.
![Page 22: Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves.](https://reader031.fdocuments.us/reader031/viewer/2022013011/55180386550346c6568b52b2/html5/thumbnails/22.jpg)
Examples of Indifference Curves
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.
• It actually corresponds to U(A, B) = AB
![Page 23: Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves.](https://reader031.fdocuments.us/reader031/viewer/2022013011/55180386550346c6568b52b2/html5/thumbnails/23.jpg)
Examples of Indifference Curves
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.
• It actually corresponds to U(A, B) = AB
• To see this, note that
(0.5A)(2B) = AB.
![Page 24: Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves.](https://reader031.fdocuments.us/reader031/viewer/2022013011/55180386550346c6568b52b2/html5/thumbnails/24.jpg)
Examples of Indifference Curves
Apples and Bananas
\
A
B1
57
2
4
38
6I1
![Page 25: Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves.](https://reader031.fdocuments.us/reader031/viewer/2022013011/55180386550346c6568b52b2/html5/thumbnails/25.jpg)
Examples of Indifference Curves
Apples and Bananas
\
A
B1
57
2
4
38
6I2
I1
![Page 26: Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves.](https://reader031.fdocuments.us/reader031/viewer/2022013011/55180386550346c6568b52b2/html5/thumbnails/26.jpg)
Examples of Indifference Curves
Apples and Bananas
\
A
B1
57
2
4
38
6I2
I1
I3
![Page 27: Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves.](https://reader031.fdocuments.us/reader031/viewer/2022013011/55180386550346c6568b52b2/html5/thumbnails/27.jpg)
Examples of Indifference Curves
More to Come
• Done– The Basic Model of Utility Maximization– Some Applications to Indifference Curve
• We continue this topic in the next lecture.
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Examples of Indifference Curves
End
©2004 Charles W. Upton