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If the axes depicting coconut collection and leisure are reversed and plotted with Crusoe's indifference map and production function, [1] figure 2 can be drawn: Figure 2: The Robinson Crusoe economy's production function and indifference curves. The production function is concave in two dimensions and quasi-convex in three dimensions. This ...
An example of how indifference curves are obtained as the level curves of a utility function. A graph of indifference curves for several utility levels of an individual consumer is called an indifference map. Points yielding different utility levels are each associated with distinct indifference curves and these indifference curves on the ...
Left graph: A risk averse utility function is concave (from below), while a risk loving utility function is convex. Middle graph: In standard deviation-expected value space, risk averse indifference curves are upward sloped.
An example indifference curve is shown below: Each indifference curve is a set of points, each representing a combination of quantities of two goods or services, all of which combinations the consumer is equally satisfied with. The further a curve is from the origin, the greater is the level of utility.
The indifference curves are straight lines (when there are two goods) or hyperplanes (when there are more goods). Each demand curve (demand as a function of price) is a step function : the consumer wants to buy zero units of a good whose utility/price ratio is below the maximum, and wants to buy as many units as possible of a good whose utility ...
Whether indifference curves are primitive or derivable from utility functions; and; Whether indifference curves are convex. Assumptions are also made of a more technical nature, e.g. non-reversibility, saturation, etc. The pursuit of rigour is not always conducive to intelligibility. In this article indifference curves will be treated as primitive.
Income–consumption curve; Indifference curve; Inverted yield curve; IS–LM model; IS/MP model; J. J curve; K. Kuznets curve; L. ... Media in category "Economics ...
In two dimensional case, the indifference curves are parallel; which is useful because the entire utility function can be determined from a single indifference curve. Definition in terms of utility functions