Analyzing Consumer Preference Data
A researcher has collected the following data points representing two different levels of satisfaction (utility) for a consumer based on their weekly leisure hours and income. Analyze the data provided in the table. What specific property do these preferences exhibit regarding the relationship between the two indifference curves represented by these data points? Justify your answer using specific values from the table.
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A consumer's preferences for two goods, free time (horizontal axis) and grain (vertical axis), are represented by indifference curves that are vertical shifts of one another. At 15 hours of free time, the consumer requires an additional 5 bushels of grain to move from indifference curve IC1 to a higher curve IC2. Based on this specific property of the preferences, what can be concluded?
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Consider a consumer whose preferences for good X (horizontal axis) and good Y (vertical axis) are represented by indifference curves that are vertical shifts of one another. If this consumer needs 10 extra units of good Y to move from indifference curve A to indifference curve B when they have 5 units of good X, then they will need more than 10 units of good Y to make the same move from curve A to curve B when they have 20 units of good X.
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Figure 5.3b: Constant MRS at a Given Level of Free Time