From Revealed Preference to Indifference Curves Suppose we observe A:(p1P2)=($1$1)&(×1,×2)=1515 p1p2)=($2车1)&(x1×2)=10,20) C:(p1p2)=($1,$2)&(x1x2)=(20,10) D:(p1p2)=($2$5)&(x,×2)=(30,12) E:(p1p2)=($5$2)&(x1,X2)=(12,30 Where lies the indifference curve ntaining the bundle a=(15, 15)? 北京大学经济学院 Slide21
北京大学经济学院 Slide21 From Revealed Preference to Indifference Curves • Suppose we observe: A: (p1,p2) = ($1,$1) & (x1,x2) = (15,15) B: (p1,p2) = ($2,$1) & (x1,x2) = (10,20) C: (p1,p2) = ($1,$2) & (x1,x2) = (20,10) D: (p1,p2) = ($2,$5) & (x1,x2) = (30,12) E: (p1,p2) = ($5,$2) & (x1,x2) = (12,30). • Where lies the indifference curve containing the bundle A = (15,15)?
From Revealed Preference to Indifference Curves 2 E 北京天学经济学院 slide22 X1
北京大学经济学院 Slide22 From Revealed Preference to Indifference Curves x2 x1 A B E C D
From Revealed Preference to Indifference Curves 2 is directly revealed preferred to any gray bundle X1 北京大学经济学院 slide23
北京大学经济学院 Slide23 From Revealed Preference to Indifference Curves x2 x1 A A is directly revealed preferred to any gray bundle. A
From Revealed Preference to Indifference Curves 2 A is directly revealed preferred to B and B is directly revealed preferred to all gray bundles B By transitivity, a is indirectly revealed preferred to all gray bundles X1 北京大学经济学院 slide24
北京大学经济学院 Slide24 From Revealed Preference to Indifference Curves x2 x1 B A is directly revealed preferred to B and B is directly revealed preferred to all gray bundles. By transitivity, A is indirectly revealed preferred to all A gray bundles
From Revealed Preference to Indifference Curves 2 so A is now revealed preferred to all bundles in the union B X1 北京大学经济学院 Slide25
北京大学经济学院 Slide25 From Revealed Preference to Indifference Curves x2 x1 B so A is now revealed preferred to all bundles in the union. A