A policymaker is modeling a community's preferences between two 'bads': unemployment rate and inflation rate. Assuming the community dislikes both, a combination of 4% unemployment and 6% inflation would lie on a higher, more preferred indifference curve than a combination of 3% unemployment and 5% inflation.
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Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
Ch.3 Doing the best you can: Scarcity, wellbeing, and working hours - The Economy 2.0 Microeconomics @ CORE Econ
Application in Bloom's Taxonomy
Cognitive Psychology
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Consider two individuals, Maria and David, who are choosing between income and leisure time. Maria places a very high value on her free time and would require a large increase in income to be convinced to work an extra hour (giving up an hour of leisure). David is more career-oriented and is willing to work an extra hour for a relatively small pay increase. On a graph with income on the vertical axis and hours of leisure on the horizontal axis, how would their preferences be represented?
Modeling Preferences for Urban Policy
A consumer's preferences for different pairs of goods can be represented by indifference curves with distinct shapes. Match each description of a consumer's preferences with the shape of the indifference curves that would represent them.
Modeling Job Preferences
Modeling Intertemporal Choice
A policymaker is modeling a community's preferences between two 'bads': unemployment rate and inflation rate. Assuming the community dislikes both, a combination of 4% unemployment and 6% inflation would lie on a higher, more preferred indifference curve than a combination of 3% unemployment and 5% inflation.
An individual is evaluating potential jobs based on two attributes: annual salary and the level of workplace risk. They prefer a higher salary but a lower level of risk. On a graph with 'Annual Salary' on the vertical axis and 'Workplace Risk' on the horizontal axis, what would be the shape of this individual's indifference curves, assuming curves further to the northwest represent greater levels of satisfaction?
Designing a Preference Model for Substitutes
Urban Planning and Community Preferences
A city planner is modeling community preferences between two public services: the number of public parks and the number of libraries. The community values both, but a recent survey reveals a strong belief that for every new park built, a new library must also be built to serve the surrounding population. Building a new park without a corresponding new library (or vice-versa) does not increase the community's overall satisfaction. If 'Number of Parks' is on the horizontal axis and 'Number of Libraries' is on the vertical axis, which of the following best describes the shape of the community's indifference curves?