Relating Household Preference to Individual Preference
To illustrate how household preferences are derived, consider a specific bundle: 20 hours of total non-working time and $300 of total consumption for the household. To determine the household's value for this bundle, one would assess an individual member's preference for their equal share, which corresponds to 10 hours of non-working time and $150 of consumption.
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CORE Econ
Introduction to Microeconomics Course
Ch.3 Doing the best you can: Scarcity, wellbeing, and working hours - The Economy 2.0 Microeconomics @ CORE Econ
The Economy 2.0 Microeconomics @ CORE Econ
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Relating Household Preference to Individual Preference
Consider a two-person household where both individuals have identical preferences and agree to share all goods equally. An individual member is indifferent between two personal consumption bundles: Bundle A (16 hours of free time per day, $50 of consumption) and Bundle B (15 hours of free time per day, $60 of consumption). Based on this information, what can be concluded about the household's preferences over its total daily bundles?
Household Preference Derivation
The Role of Identical Preferences in Household Models
Consider a model of household choice where a household's collective preferences are determined by the preferences of its individual members. If the members of a two-person household have identical preferences but do not agree to share all goods equally, the household's indifference curve can still be accurately constructed by analyzing one member's indifference curve for their personal share of the household's total goods.
A two-person household consists of members with identical preferences who agree to share all goods equally. An individual member is indifferent between the four personal consumption bundles listed in the 'Term' column. Match each individual bundle to the corresponding total household bundle that would lie on the household's equivalent indifference curve.
Consider a two-person household where both members have identical preferences and agree to share all goods equally. If one member's indifference curve passes through the point representing 12 hours of free time per day and $80 of consumption, then the corresponding household indifference curve must pass through the point representing a total of 24 hours of free time per day and a total consumption of $____.
Critique of the Simplified Household Preference Model
Consider a two-person household where both members have identical preferences and agree to share all goods equally. The household as a whole is indifferent between two bundles of total daily goods: Bundle H1 (32 hours of free time, $200 of consumption) and Bundle H2 (30 hours of free time, $220 of consumption). Based on this information, what can be inferred about the preferences of a single member of this household?
Consistency of Household Preference Data
Limitations of the Household Preference Model
Learn After
Two large technology firms, one a leading smartphone manufacturer and the other the developer of a popular mobile operating system, propose a merger. In their submission to the competition authority, which of the following arguments would they most likely present as a primary consumer benefit to justify the merger?
A two-person household, where both individuals have identical preferences and agree to share outcomes equally, is considering a bundle of 30 hours of total non-working time and $600 of total consumption. According to the model for deriving household preferences, what individual bundle would be used to determine the household's preference for this option?
Household Job Offer Decision
A two-person household, where both individuals have identical preferences and agree to share all outcomes equally, is indifferent between two options. Option A provides a total of 20 hours of non-working time and $400 of consumption. Option B provides a total of 30 hours of non-working time and $300 of consumption. Based on this information, what can be concluded about an individual member's preferences?
Method for Comparing Household Bundles
Consider a two-person household where both individuals have identical preferences and agree to share all outcomes equally. An individual member of this household prefers a personal bundle of 12 hours of non-working time and $250 in consumption over a personal bundle of 15 hours of non-working time and $200 in consumption. Therefore, the household as a whole would prefer a total bundle of 24 hours of non-working time and $500 in consumption over a total bundle of 30 hours of non-working time and $400 in consumption.
Consider a two-person household where both individuals have identical preferences and agree to share all outcomes equally. An individual member of this household is indifferent between a personal bundle of 10 hours of non-working time and $200 in consumption, and a personal bundle of 12 hours of non-working time and $180 in consumption. Based on this information, which of the following total household bundles would the household prefer over a total household bundle of 20 hours of non-working time and $400 in consumption?
Explaining Household Decision-Making
A research model is used to understand the choices of two-person households. The model assumes both individuals in a household have identical preferences and agree to share all outcomes (consumption and non-working time) equally. The household's preference for a total bundle is determined by an individual's preference for their equal share of that bundle. Match each total household bundle on the left with the corresponding individual bundle on the right that would be used to evaluate it.
Determining Individual Share of a Household Bundle
A two-person household, where both individuals have identical preferences and agree to share all outcomes equally, is indifferent between two options. Option A provides a total of 20 hours of non-working time and $400 of consumption. Option B provides a total of 30 hours of non-working time and $300 of consumption. Based on this information, what can be concluded about an individual member's preferences?