prefer.3 - Econ 100A: Chapter 3, Preferences Thomas G. Koch...

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Econ 100A: Chapter 3, Preferences Thomas G. Koch Fall 2008 Thomas G. Koch Preferences (3) 1(31)
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Where we were last time Budget constraint What we can afford Thomas G. Koch Preferences (3) 2(31)
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What this looks like Thomas G. Koch Preferences (3) 3(31)
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But what do we want? We need to talk about preferences Thomas G. Koch Preferences (3) 4(31)
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Apples vs. Oranges Which “bundle” would you prefer? Three apples, and two oranges . . . two apples and three oranges? Thomas G. Koch Preferences (3) 5(31)
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But my mother always said . . . “You can’t compare apples and oranges.” But we have to! Trying to provide a science of fruit consumption! Thomas G. Koch Preferences (3) 6(31)
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Consider two bundles Amount x 1 of good one Amount x 2 of good two This bundle is ( x 1 , x 2 ) Second bundle: ( y 1 , y 2 ) Thomas G. Koch Preferences (3) 7(31)
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Thomas G. Koch Preferences (3) 8(31)
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What it means to prefer ( x 1 , x 2 ) ± ( y 1 , y 2 ): Prefer first bundle ( x 1 , x 2 ) ( y 1 , y 2 ): Indifferent ( x 1 , x 2 ) ² ( y 1 , y 2 ): Weakly preferred Thomas G. Koch Preferences (3) 9(31)
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prefer.3 - Econ 100A: Chapter 3, Preferences Thomas G. Koch...

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