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Equation of an Indifference Curve
Given a utility function that describes an individual's preferences over two goods (such as free time and consumption ), the equation for a specific indifference curve is formed by setting the utility function equal to a constant. The equation takes the general form , where represents a particular, fixed level of utility.
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CORE Econ
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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
Related
General Utility Function for Consumption and Free Time
Karim's Specific Utility Function
Equation of an Indifference Curve
Using Alternative Utility Functions to Model Different Preferences
Consider two individuals, Alex and Ben, who consume two goods, apples (x) and bananas (y). Alex's preferences are represented by the utility function U_A(x, y) = x * y. Ben's preferences are represented by the utility function U_B(x, y) = 2 * (x * y) + 10. Based on these functions, which of the following statements is true?
Interpreting Utility Values
A consumer's preferences are represented by a utility function. If this function assigns a value of 80 to bundle A and a value of 40 to bundle B, it means that the consumer derives exactly twice as much satisfaction from bundle A as from bundle B.
An individual's preferences for two goods, coffee (x) and donuts (y), are represented by the utility function U(x, y) = x + 2y. Consider the following four consumption bundles:
- Bundle A: 4 coffees, 3 donuts
- Bundle B: 6 coffees, 2 donuts
- Bundle C: 2 coffees, 5 donuts
- Bundle D: 8 coffees, 1 donut
Which of the following correctly ranks these bundles from most preferred to least preferred?
The Role of a Utility Function
A consumer, Jordan, enjoys drinking coffee (C) but is completely indifferent to the number of sugar packets (S) available, as they always drink their coffee black. Jordan's satisfaction depends solely on the quantity of coffee consumed; more coffee is always preferred to less, regardless of the amount of sugar. Which of the following utility functions accurately represents Jordan's preferences?
A consumer has the following preferences over bundles of two goods, pizza (P) and soda (S):
- They prefer the bundle (4P, 2S) over the bundle (3P, 3S).
- They are indifferent between the bundle (3P, 3S) and the bundle (2P, 5S).
Which of the following utility functions is inconsistent with this consumer's stated preferences?
A consumer's preferences for two goods, books (B) and movies (M), are represented by the utility function U(B, M) = B + 3M. Analyze this function. Which of the following statements accurately describes the consumer's preferences?
Evaluating the Validity of Utility Functions
A utility function mathematically represents a consumer's preferences for different bundles of goods. Analyze each of the following utility functions, where 'x' and 'y' represent the quantities of two different goods. Match each function to the description of preferences it best represents.
Learn After
Equation of Karim's Indifference Curve
Activity: Plotting an Indifference Curve from an Equation
Marginal Rate of Substitution (MRS)
Calculus-Based Methods for Analyzing Indifference Curves
An individual's preferences for hours of free time per day (
t) and units of consumption (c) are represented by the utility functionu(t, c) = t * c. If this individual currently has 20 hours of free time and 80 units of consumption, which equation represents the indifference curve passing through this specific combination of goods?Deriving and Interpreting an Indifference Curve Equation
Comparing Bundles on an Indifference Curve
Comparing Bundles on an Indifference Curve
An individual's preferences for two goods, Good X and Good Y, are described by the utility function u(X, Y) = X²Y. If the individual is currently consuming a bundle of 4 units of Good X and 10 units of Good Y, which of the following bundles would provide the exact same level of satisfaction?
Consider an individual whose preferences for daily hours of free time (
t) and units of consumption (c) are represented by the utility functionu(t, c) = t + 2c. This individual would strictly prefer the combination of 10 hours of free time and 5 units of consumption over the combination of 6 hours of free time and 7 units of consumption.An individual's preferences for two goods, apples (A) and bananas (B), are such that they are always willing to trade one apple for exactly two bananas to maintain the same level of satisfaction, regardless of how many of each they currently have. Which equation best represents an indifference curve for this individual, where
ūis a constant level of utility?Match each utility function, which describes an individual's preferences over two goods (x and y), with the corresponding description of the preferences it represents. An indifference curve is formed by setting each function equal to a constant.
An individual's preferences for two goods, x and y, are represented by the utility function
u(x, y) = x * y. If this individual is consuming a bundle of 10 units of good x and 5 units of good y, the equation for the indifference curve passing through this point isx * y = ____.An economist has a utility function representing a consumer's preferences for two goods, X and Y. The economist wants to find the equation for the specific indifference curve that passes through the consumer's current consumption bundle. Arrange the following steps in the correct logical order to accomplish this.