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Ch 9 Indifference curves-shortversion

# 5 pm 12 3 8 6 3 qp 10 qm 10 qm 3 4 2 12 6 01234 3 f 5

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Unformatted text preview: Qp = 10 − Qm = 10 − Qm 3 4 2 …\$12 …\$6 01234 …\$3 f 5 y 30 = = 10 pm 3 6 7 8 9 10 10 Movies (per month) Pop (six-packs per month) A Change in Income Change 10 y 30 = =5 pm 6 a 8 Income \$30 6 y 30 = = 10 pp 3 y 15 = = 2.5 pm 6 y 15 = =5 pp 3 4 Income \$15 2 01 2 3 4 f 5 6 7 8 9 10 Movies (per month) Indifference Curves Indifference a line that shows combinations of goods among which a consumer is indifferent. Pop (six-packs per month) An Indifference Curve All points on this line are equally good good Preferred 10 8 6 c 4 2 0 Not preferred 2 4 g 6 8 10 Movies (per month) Pop (six-packs per month) A Preference Map 10 8 6 c j 4 2 I2 g I0 0 2 4 6 I1 8 10 Movies (per month) Marginal Rate of Substitution Marginal the rate at which a person will give up one good in order to get more of another good and at the same time remain indifferent. measured by the slope of an indifference curve. Steep Flat indiffer...
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