sp25-econ101 econ101
Lecture 14: Indifference curves and consumer choice Lecture 14: Indifference curves and consumer choice
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Indifference curves
Important exceptions
Price changes
How literal is rationality?
Figures from the lecture
Representing utility functions
Representing utility functions
Indifference curves
Indifference curves are like topo maps
Indifference curves
Properties of indifference curves
Tradeoffs along the indifference curve
Tradeoffs along the indifference curve
Optimal consumption, revisited
“Extreme” indifference curves (1)
“Extreme” indifference curves (2)
Effect of an increase in donut price
Substitution effect
Substitution + income effect
Labor supply: consumption vs. leisure
Saving: consuming tomorrow vs. today