ECON 10010 Lecture Notes - Lecture 9: Bc1, Budget Constraint, Indifference Curve
Document Summary
Lecture: consumer choice is the choice to consume anything that we want, for any choice that doesn"t involve production, constraints determine consumption behavior, preferences determine which particular choice we make. Constraints: gains from math, get as simple, universal nomenclature (common language, assures that our conclusions follow from our premises, math closely describes reality (true for constraints, less true for preferences) soda. Ice cream: constant ratio = constant slope. If we increase the income to 20, we go back to bc1: an increase in income shifts bc to the right (out, nominal prices increased in name only (dollar amount) 24: budget (income) = 24 hours, prices: 1 hour netflix, 2 hours of homework, ratio is or 2. For every hour of netflix watch, you lose hours of homework. The price of netflix is double the price of homework. You can either purchase consumption goods with the $ you made from working a certain. Suppose income = 24 hours number of hours.
