ECON 1011 Chapter Notes - Chapter 4: Edgeworth Box, Marginal Utility, Indifference Curve
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ECON 1011 Full Course Notes
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Document Summary
The invisible hand the natural workings of a market economy: no one person created or designed the economic activity of the world, it comes from the idea to truck, barter, and exchange something for another thing. Trucking move an object from one place to another. Barter discuss the price of the item. Exchange the actual giving of amount for item: exchange is the most important building block. Indifference curve is a line drawn through all the combinations of the goods (apples and oranges) Indifference curves are negatively sloped and utility is higher when a person gets more utility for having more of any goods. Different people have different preferences over the same two goods. One person"s indifference curve cannot cross with another because it would mean that person gets same utility with more of goods. There is no such thing as a utility monitor cannot directly measure the happiness created by consumption of goods.
