AS.180.101 Chapter Notes - Chapter 2 and 4: Indifference Curve, Pareto Efficiency, Budget Constraint
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We will ignore the whole question of efficiency in production. Notice: in exercise 2. 1 the indifference curves are indeed curves; for both otto and blanche, the indifference curve gets steeper as it gets closer to the y axis. When otto finds himself near the y axis, with lots of flax and not much. Blanche and otto are both at point i, is not economically. We have found a way to make a consumer better ff without making any other consumer worse off. *the slope of a consumer"s indifference curve precisely expresses the terms under which he or she is willing to exchange one good for another. Blanche is willing to exchange . 4 flax for 1 gatorade; otto is willing to exchange 1 for 1. Delta f/delta g is the average value of the slope. This answers quiz question of indifference curves .
