ECON 2300 Study Guide - Quasilinear Utility, Utility, Indifference Curve
Document Summary
Preferences - a reminder: x y: x is preferred strictly to y, x ~ y: x and y are equally preferred, x y: x is preferred at least as much as is y. Completeness: for any two bundles x and y it is always possible to state either that x or that y y x. Reflexivity: any bundle x is always at least as preferred as itself; i. e. x x. Transitivity: if x is at least as preferred as y, and y is at least as preferred as z, then x is at least as preferred as z; i. e. x y and y z x z. U(x") = u(x ): utility is an ordinal (i. e. ordering) concept, e. g. if u(x) = 6 and u(y) = 2 then bundle x is strictly preferred to bundle y. But x is not preferred three times as much as is y.