ECON 1B03 Lecture 1: ECON 1B03- Week 12 Module 5
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ECON 1B03- Week 12 November 20, 2018
Consumer Theory: Consumer Preferences
• Mickey can have various affordable combinations of hockey games and basketball
games per week that would make him equally satisfied,
i.e., give him the same TU.
• For instance, 1 basketball and 3 hockey games, or 4 hockey games and 2 basketball
games or 3 basketball and 1 hockey game are all combos that may give him a TU of say,
- Mickey would be indifferent as to which
combo he had.
• The combos that all yield the same TU are given by a utility function.
• We can graph these combos as indifference curves, ICs.
• Every point on an IC has the same TU as every other point on the same curve.
• Higher curves mean more goods in a combo and therefore greater total utility.
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