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PAM 200 9.3 Notes

PAM 200 9.3 Notes - “Perfect Compliments” right angle...

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9/3/07 PAM 200 Use a notepad First law of demand: As relative prices increase, quantity demanded decreases, (ceteris paribus) At the optimal happiness point the slope of the budget constraint and the slope of the contour line are equal Contour lines/indifference curves can not cross What is the shape of indifference curves?
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Unformatted text preview: “Perfect Compliments”: right angle indifference curves Typical compliments: C-shaped curved indifference curves Utility is not measured by distance from the origin rather how many contour lines it passes (depending on variables contour lines (indifference curves) change)...
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