ECON 1B03 Lecture Notes - Lecture 21: Indifference Curve, Substitute Good, Italian General Confederation Of Labour

• School: McMaster University
• Department: Economics
• Course: ECON 1B03
• Professor: Hannah Holmes

Document Summary

1 price changes = the end associated to that price change on the bc curve shifts accordingly: consumer preferences, consumers are indifferent it is affordable. consumption bundle, indifference curves. This makes consumers indifferent concerning quantity of each good in their: curves that graph different combinations that yield the same tu, every point on the same indifference curve has the same tu as every other point on that same curve, higher indifference curves mean more goods in a combination and therefore higher utility. 2 extreme cases: perfect substitutes, two goods with a straight line indifference curves are perfect substitutes, mrs is constant, ex: 2 nickels for 1 dime, perfect complements, two goods with right angle indifference curves are perfect complements, it doesn"t matter how much more of one good you consume, as long as you consume them in a fixed proportion, maximizing utility, ex: 1 right shoe and 1 left shoe, overview.