CAS EC 101 Lecture : EC101 Sept25

• School: Boston University
• Department: Economics
• Course: CAS EC 101
• Professor: Neil Watson

Document Summary

Indifference curves (review: the other part of the consumer"s decision process: budget constraints, definition, slope, opportunity cost, consumer optimum: putting indifference curves and budget constraints together, the consumer"s preference, higher indifference curves represent higher utility, indifference curves never cross, indifference curves usually slope downward, indifference curves are usually convex bowed inward toward the origin (sometimes called concave up , marginal rate of substitution, mrs measures the amount of good y you are willing to give up to get one more unit of x, mrsyx = mux/muy, diminishing marginal rate of substitution means that as you move down along an indifference curve, behind the demand curve, two factors in a consumption decision.