Karim's Indifference Map

An individual's preferences for daily free time (t, in hours) and consumption (c, in dollars) can be represented by a set of curves defined by the equation (t - 6)(c - 45) = k, where k is a constant representing a specific level of satisfaction. If this person is currently satisfied with 16 hours of free time and a consumption of $55, what level of consumption would be required to maintain the exact same level of satisfaction if their free time were to decrease to 11 hours?

Interpreting an Indifference Curve Equation

Isolating a Variable in an Indifference Curve Equation

Comparing Consumption Bundles

A person's preferences for daily free time (t, in hours) and consumption (c, in dollars) are modeled by a family of curves where (t - 6)(c - 45) = k, and k is a positive constant representing a specific level of satisfaction. Based on this model, a combination of 5 hours of free time and $100 of consumption would yield a positive level of satisfaction.

Interpreting Utility Function Parameters

An individual's preferences for daily free time (t, in hours) and consumption (c, in dollars) are modeled by a set of indifference curves where (t - 6)(c - 45) = k, with k representing the level of satisfaction. Match each consumption bundle in the left column with a bundle from the right column that provides the exact same level of satisfaction.

Evaluating Trade-offs Along a Satisfaction Curve

An individual's satisfaction from daily free time (t, in hours) and consumption (c, in dollars) is described by an equation where (t - 6)(c - 45) = u, and u is a constant value representing the level of satisfaction for a specific preference curve. For this individual, the combination of 10 hours of free time and $95 of consumption provides the exact same level of satisfaction as 26 hours of free time and$55 of consumption. The constant level of satisfaction, u, for this specific preference curve is ____.

Consider an individual whose preferences for daily free time (t, in hours) and consumption (c, in dollars) are represented by the family of curves where (t - 6)(c - 45) = k, with k being a positive constant for any given curve. This equation implies that to maintain the same level of satisfaction, the amount of consumption the individual is willing to give up for one additional hour of free time is constant, regardless of how much free time they currently have.