Microeconomics |
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˹éÒ 186
Lisa is indifferent between point c and the other points on the line Iv such as point
g. The line is called an indifference curve. An indifference curve is a line that
shows all combinations of two goods that give the consumer equal satisfaction.
Lisa is indifferent between point c and the other points on the line Iv such as point
g. The line is called an indifference curve. An indifference curve is a line that
shows all combinations of two goods that give the consumer equal satisfaction.
˹éÒ 189
They do, however, illustrate that the shape of the indifference curve shows the
degree of substi- tutability between two goods. The more perfectly substitutable
the two goods, the more nearly are their indifference curves straight lines and the
...
They do, however, illustrate that the shape of the indifference curve shows the
degree of substi- tutability between two goods. The more perfectly substitutable
the two goods, the more nearly are their indifference curves straight lines and the
...
˹éÒ 190
Higher indifference curves (such as /2) do not touch her budget line, and so she
cannot afford any point on them. At point c, the marginal rate of substitution (the
magnitude of the slope of the indifference curve) equals the relative price of ...
Higher indifference curves (such as /2) do not touch her budget line, and so she
cannot afford any point on them. At point c, the marginal rate of substitution (the
magnitude of the slope of the indifference curve) equals the relative price of ...
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