Preference Map.docx

2 Pages
Unlock Document

University of Calgary
Business and Environment
BSEN 401
William Huddleston

Preference Map - Indifference Curves are dense in commodity space, i.e., every combination of X and Y is on an Indifference Curve. - By the principles of Non-Satiation and Transitivity, all combinations above Indifference Curves are preferred to points on the Indifference curve and all combinations on Indifference Curves are preferred to combinations below the Indifference Curve. - Since Indifference Curves are derived from ordinal utility, i.e., preference ranking of combinations rather than actual measurement of levels of utility, there is no cardinal measurement (assignment of a particular number) of comparative preferences. We can say that combinations above (for example) an indifference curve are preferred to combinations on the indifference curve but we cannot measure the amount of the preference. Consumer Equilibrium (Optimal Preference or Maximum Utility) - Since we assume that Consumers’ attempt to maximize their preference (utility), Consumer Equilibrium implies that the consumer’s
More Less

Related notes for BSEN 401

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.