Search results
A utilitarian social indifference curve is linear and downward sloping to the right. The Max-Min social indifference curve takes the shape of two straight lines joined so as they form a 90-degree angle. A social indifference curve drawn from an intermediate social welfare function is a curve that slopes downward to the right.
A set of convex-shaped indifference curves displays convex preferences: Given a convex indifference curve containing the set of all bundles (of two or more goods) that are all viewed as equally desired, the set of all goods bundles that are viewed as being at least as desired as those on the indifference curve is a convex set.
File:Simple-indifference-curves.svg. Size of this PNG preview of this SVG file: 217 × 217 pixels. Other resolutions: 240 × 240 pixels | 480 × 480 pixels | 768 × 768 pixels | 1,024 × 1,024 pixels | 2,048 × 2,048 pixels. This is a file from the Wikimedia Commons. Information from its description page there is shown below.
The substitution effect is the change that would occur if the consumer were required to remain on the original indifference curve; this is the move from A to B. The income effect is the simultaneous move from B to C that occurs because the lower price of one good in fact allows movement to a higher indifference curve.
Budget constraint, where and. In economics, a budget constraint represents all the combinations of goods and services that a consumer may purchase given current prices within his or her given income. Consumer theory uses the concepts of a budget constraint and a preference map as tools to examine the parameters of consumer choices .
The Indifference Map refers to a set of Indifference Curves that reflects an understanding and gives an entire view of a consumer’s choices. The below diagram shows an indifference map with three indifference curves. Here, we understand that all three products resting in the indifferent curve give him the same satisfaction.
Jan 23, 2023 · Now, an indifference curve defines a set of all of the points (i.e., all of the bundles) that are better than those on the indifference curve. We call that set the upper contour set. For a standard textbook Cobb-Douglas indifference curve, that set would look like this (notice the upper contour set is convex):
