This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: Different indifference curves represent different levels of utility, and in general, more is better: the more goods you have, the happier you are. On the graph, we see this preference for more as an indifference curve that is further away from the origin. Thus, because curve 2 is further out than curve 1, and represents a higher level of utility, any point on curve 2 will be preferable to any point on curve 1, and any point on curve 3 will be preferable to any point on curves 1 or 2. A few more important observations about one person's indifference curves: they can never cross. Why is this true? Think about it this way: if curve 2 is supposed to make you happier than curve 1, but curve two crosses curve 1, then that means that at the point of intersection, you are experiencing two different levels of utility, that is, you are...
View Full Document
- Fall '11