Indifference Curves Flashcards by Mabs Academy

Q

The shape of the indifference curve is not chosen at random, but rather illustrates the assumptions which we make about consumer preferences.

The 2 factors are?

A

non-satiation (the state of never being satisfied)
diminishing marginal utility (utility decreases the more you have of it but it will never be 0)

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Q

Utility as a function of one good (picture)

A

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Q

Utility as a function of two goods (picture)

A

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