PDF-Utility Indifference

xF0EE FHI TECHNICAL REPORT xF0ED Stuart Armst rong Technical Report 20 1 0 1 C ite as Armstrong S 20 1 0 x201C Utility Indifference x201D Technical Report 20 10 1 Future. Indifference curves . Chapter 3. Budget line. 2. Points on the budget line indicate all the bundles of goods that the consumer can afford.. Good 2. 150. 50. 100. Good 1. 150. 100. 0. 50. Indifference Curve. Curve . Analysis. ASSUMPTION OF INDIFFERENCE CURVE. ANALYSIS.. 1. A consumer is assumed to buy any two goods in combinations.. 2. A consumer can rank the alternative combinations and compare their level of satisfaction, and he prefers a combination providing a higher level of satisfaction.. 14. February 26. th. , 2014. Lecture . 16. Ch. . 9. . Ordinal Utility:. Indifference Curve Analysis. Indifference . Curves. An . indifference curve. . represents all the combinations of the two goods amongst which. Ms. Parra 2012. stifle. verb. To suppress, curb or . withold. capitulation. Noun. The act of surrendering, giving up resistance. vital. Adjective. Necessary to life. quarrel. noun. an . angry. fight or disagreement.. Part I. CONSUMER THEORY. Laura Sochat. Budget constraint I. Income is one of the factors affecting the quantity demanded by consumers. . I like to spend money on food and on clothes. Assume they cost £5/g and £10/unit respectively. Also assume that my weekly income is £200.. 3.1 Consumer Preferences. 3.2 Budget Constraints. 3.3 Consumer Choice. 3.4 Revealed Preference. 3.5 Marginal Utility and Consumer Choice. 3.6 Cost-of-Living Indexes. Consumer Behavior. ●. . theory of consumer behavior . M.N. SIKWILA. (PhD Economics). CONTACT: 0736024908. LESSON: OUTCOMES. After this lesson you should be able to:. Explain economic concepts models used in your industry and the economy . Discuss micro and macroeconomic issues that affect the working of the economy. Warm-up Question. What do dating and marriage have to do with economics? . Scarcity. Choice. Utility maximization . Economics and Marriage. A market is any mechanism or institution that brings buyers together with sellers. Consumer theory. Key concepts. budget constraint: the choices a consumer can afford.. indifference curves: a representation of a consumer’s preferences.. a consumer’s optimal choices.. a consumer’s responses to changes in income and changes in prices.. Edition. PART II. THE MARKET SYSTEM. Choices Made by Households and Firms. Copyright. PART II THE MARKET SYSTEM . (1 of 2. ). Assumptions for Chapters 6 through 12:. perfect . knowledge . The assumption that households . Objectives: . Upon completion of this unit students should be able to;. Define the concept of utility as basis of demand.. Define Marginal utility and diminishing marginal utility.. Draw indifference curve and individual demand curve.. a Science? . 2. Issues. 3. Economics doesn’t predict well. All its assumptions are wrong. It isn’t even done in good faith. Economics . doesn’t . predict. 4. Three replies:. No . one . predicts . 2. Agenda. Consumer Utility. Consumer Choice. Revealed Preference. 3. Consumer Theory. There are two important pillars that consumer theory rests upon:. The utility function. The budget constraint. 4. Introduction. Supply and Demand Models (Ch. 2) are useful for analyzing economic questions concerning markets.. How will increasing the real wage affect output?. In these models we summed each individuals demand to obtain the market demand curve..