ECON 2GG3 Study Guide - Final Guide: Sealtest Dairy, Indifference Curve, Convex Set

• School: McMaster University
• Department: Economics
• Course: ECON 2GG3
• Professor: Robert Jefferson

Document Summary

Individuals are willing to make tradeoffs between different goods preference statements: ability to say you like a bundle better, ability to say you like both equally (indifferent) preference ordering, using preference statements, if 2 conditions are satisfied, always able to make preference statements, preference statements are consistent. Preference relations: comparing 2 consumption bundles, x (has x1 of good 1 and x2 of good 2, y (has y1 of good 1, y2 of good 2, strict preference: x is more preferred than y, x o, x y (cid:224) x preferred strictly to bundle y, weak preference: x is liked as much as y (at least as preferred) o, x y (cid:224) x preferred at least as much as y. Indifference: x is exactly liked as much as y: x ~ y (cid:224) x & y equally preferred y and y y and (not y x x ~ y x) x y x x.