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Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves.

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Presentation on theme: "Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves."— Presentation transcript:

1 Lectures in Microeconomics-Charles W. Upton Examples of Indifference Curves

2 Three Examples We are going to do some special cases to illustrate how some special indifference curves look.

3 Examples of Indifference Curves Coke® or Pepsi® I dont care whether you have Coke® or Pepsi®, as long as it is cola.

4 Examples of Indifference Curves Coke® or Pepsi® I dont care whether you have Coke® or Pepsi®, as long as it is cola. This is a case we discussed earlier: perfect substitutes.

5 Examples of Indifference Curves Coke and Pepsi \ Coke Pepsi

6 Examples of Indifference Curves Coke and Pepsi \ Coke Pepsi

7 Examples of Indifference Curves Coke and Pepsi \ Coke Pepsi I1I1

8 Examples of Indifference Curves Coke and Pepsi \ Coke Pepsi I1I1 I2I2

9 Examples of Indifference Curves Coke and Pepsi \ Coke Pepsi I1I1 I2I2 I3I3

10 Examples of Indifference Curves Left and Right Shoes Perfect Complements

11 Examples of Indifference Curves Left and Right Shoes \ Right Shoes Left Shoes

12 Examples of Indifference Curves Left and Right Shoes \ Right Shoes Left Shoes I1I1

13 Examples of Indifference Curves Left and Right Shoes \ Right Shoes Left Shoes I1I1 I2I2

14 Examples of Indifference Curves Left and Right Shoes \ Right Shoes Left Shoes I1I1 I2I2 I3I3

15 Examples of Indifference Curves Third Example Indifference curves between Bourbon and Temperance Lectures for W.C. Fields and Carrie Nation.

16 Examples of Indifference Curves Third Example Indifference curves between Bourbon and Temperance Lectures for W.C. Fields and Carrie Nation. –W. C. Fields was a movie actor with a legendary drinking problem.

17 Examples of Indifference Curves Third Example Indifference curves between Bourbon and Temperance Lectures for W.C. Fields and Carrie Nation. –W. C. Fields was a movie actor with a legendary drinking problem. –Carrie Nation was a prominent leader in the temperance movement.

18 Examples of Indifference Curves W. C. Fields \ Bourbon Temperance Lectures I1I1 I2I2 I3I3 I4I4

19 Examples of Indifference Curves Carrie Nation \ Bourbon Temperance Lectures I1I1 I2I2 I3I3 I4I4

20 Examples of Indifference Curves Apples and Bananas I like apples and bananas. If you cut the number of apples in half and double the number of bananas, I am just as well off.

21 Examples of Indifference Curves Apples and Bananas I like apples and bananas. If you cut the number of apples in half and double the number of bananas, I am just as well off. This is a more standard case.

22 Examples of Indifference Curves Apples and Bananas I like apples and bananas. If you cut the number of apples in half and double the number of bananas, I am just as well off. This is a more standard case. It actually corresponds to U(A, B) = AB

23 Examples of Indifference Curves Apples and Bananas I like apples and bananas. If you cut the number of apples in half and double the number of bananas, I am just as well off. This is a more standard case. It actually corresponds to U(A, B) = AB To see this, note that (0.5A)(2B) = AB.

24 Examples of Indifference Curves Apples and Bananas \ A B I1I1

25 Examples of Indifference Curves Apples and Bananas \ A B I2I2 I1I1

26 Examples of Indifference Curves Apples and Bananas \ A B I2I2 I1I1 I3I3

27 Examples of Indifference Curves More to Come Done –The Basic Model of Utility Maximization –Some Applications to Indifference Curve We continue this topic in the next lecture.

28 Examples of Indifference Curves End ©2004 Charles W. Upton


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