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Unformatted text preview: 2- According to the assumption of convexity of preferences, they are preferred to A and B. 3- So if we are indifferent between A & B, the indifference curve can't pass through these points & should be below line AB. 4 5 1 2 3 4 5 6 7 8 9 10 11 Food In line that connects these two points *A+(1-alpha)*B where alpha can vary between 0 and 1. o either B or A. 6 7 8 9 10 11 Convexity Shelter A B C1 C2 C3 C4 C5 C6 C7 C8 C9 ndifference curve...
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This note was uploaded on 02/27/2011 for the course ECON 302 taught by Professor Avrin-rad during the Spring '09 term at University of Illinois, Urbana Champaign.
- Spring '09