Consumer Preferences Clothing Combination B.A.& D (units per week) yield the same satisfaction 50 B .E is preferred to U1 .U,is preferred to H&G H 40 E A 30 D 20 G U 10 Food 10 20 30 40 (units per week) Chapter 3: Consumer Behavior Slide 16
Chapter 3: Consumer Behavior Slide 16 U1 Combination B,A, & D yield the same satisfaction •E is preferred to U1 •U1 is preferred to H & G Consumer Preferences Food (units per week) 10 20 30 40 10 20 30 40 Clothing (units per week) 50 G D A E H B
Consumer Preferences ■| difference curves o Indifference curves slope downward to the right .If it sloped upward it would violate the assumption that more of any commodity is preferred to less Chapter 3: Consumer Behavior Slide 17
Chapter 3: Consumer Behavior Slide 17 Consumer Preferences ◼ Indifference Curves ⚫ Indifference curves slope downward to the right. ◆If it sloped upward it would violate the assumption that more of any commodity is preferred to less
Consumer Preferences ■| difference curves o Any market basket lying above and to the right of an indifference curve is preferred to any market basket that lies on the indifference curve Chapter 3: Consumer Behavior Slide 18
Chapter 3: Consumer Behavior Slide 18 Consumer Preferences ◼ Indifference Curves ⚫ Any market basket lying above and to the right of an indifference curve is preferred to any market basket that lies on the indifference curve
Consumer Preferences Indifference Maps a An indifference map is a set of difference curves that describes a persons preferences for all combinations of two commodities Each indifference curve in the map shows the market baskets among which the person is indifferent Chapter 3: Consumer Behavior Slide 19
Chapter 3: Consumer Behavior Slide 19 Consumer Preferences ◼ An indifference map is a set of indifference curves that describes a person’s preferences for all combinations of two commodities. ⚫ Each indifference curve in the map shows the market baskets among which the person is indifferent. Indifference Maps
Consumer Preferences ■| difference curves o Finally, indifference curves cannot cross +This would violate the assumption that more is preferred to less Chapter 3: Consumer Behavior Slide 20
Chapter 3: Consumer Behavior Slide 20 Consumer Preferences ◼ Indifference Curves ⚫ Finally, indifference curves cannot cross. ◆This would violate the assumption that more is preferred to less