ch3lec

ch3lec - Varian Ch 3 Preferences Diaz Cho Rust February 3...

This preview shows pages 1–5. Sign up to view the full content.

Varian, Ch 3: Preferences Diaz, Cho, Rust February 3, 2003

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Consumption bundles • Consumers have preferences over many goods and services. We list the quantities of these goods and services in a vector or consumption bundle x=(x 1 ,x 2 ,…,x n ) where n is the number of goods and services. Example: if n=2 and good 1 is apples and good 2 is oranges, the vector x=(2,3) corresponds to consuming 2 apples and 3 oranges.
Preferences over bundles • We use the symbol to denote “strictly preferred”. Thus, x y denotes the statement, “the consumer strictly prefers bundle x to bundle y”. • We use the symbol to denote “indifferent between”. Thus x y denotes the statement, “the consumer is indifferent between bundle x and bundle y”. • We use the symbol to denote “weakly preferred”. Thus x y denotes the statement, “the consumer “prefers bundle x to bundle y”. ~ ~ ~ ~

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Assumptions about preferences • Preferences are complete: for any two consumption bundles x and y, either x
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/25/2011 for the course ECON 306 taught by Professor Cramton during the Spring '06 term at Maryland.

Page1 / 15

ch3lec - Varian Ch 3 Preferences Diaz Cho Rust February 3...

This preview shows document pages 1 - 5. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online