Test2 notes

Test2 notes - consumption bundles-a complete list of the...

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Unformatted text preview: consumption bundles-a complete list of the goods+services that are involved in the choice problem strictly preferred: weakly preferred: ≥ indifferent: ~ perfect substitutes-willing to substitutie one food for another @ a constant rate (straight IC, slope of -1) perfect complements-consume goods in fixed proportions (L-shaped curves) bad-commodity consumer doesnt like(positive slope, IC slope up&to the right, ^ preference down& to the right) neutral good-consumer doesnt care one way or the other (vertical ICs, prefers to the right) satiation-bliss point/most preferred (ICs surround this point, other ICs are considered lower, ICs have - slope when consumer has too much or too little of both goods, IC has + slope when he has too much of one of the goods discrete good-only available in integer amounts (bundles indifferent to a given bundle will be a set of discrete points, the set of bundles at least as good as a particular bundle will be a set of line segments) monotonicity-more is better-before satiation point (implies ICs have a negative slope, moving to an indifferent position involves going...
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