Jim Whitney Economics 250

Monday, February 04, 2013

 

Indifference curve examples

    Draw an "indifference map" for each pair of items below by doing the following:
    Step 1: Draw one indifference curve (U1) through point A.
    Step 2: Draw a second indifference (U2) showing a higher level of utility.
    Hint: Try increasing one item while holding the other constant and ask whether you better off or not. If not, you are still on the same indifference curve. If so, adjust the other item until you are back on the same indifference curve again.
   Consider consumption only. You either use them or lose them--you can't sell them, but you have free disposability

Case 1
X-axis = left shoes
Y-axis = right shoes
Case 2
X-axis = white grapefruit
Y-axis = pink grapefruit 
(assume both taste the same)
   

Case 3
X-axis = local concert tickets (for your favorite performers)
Y-axis = uselessly far away basketball tickets
Case 4
X-axis = fuel economy
Y-axis = auto fatality risk