ECON 110 Lecture Notes - Lecture 11: Kaustinen, Budget Constraint, Indifference Curve

23 views2 pages
wunch and 39345 others unlocked
ECON 110 Full Course Notes
30
ECON 110 Full Course Notes
Verified Note
30 documents

Document Summary

Midterm information: 16 multiple choice, 2 short answer (containing 3 or 4 parts each, 80 minutes, covers chapters 1, 2, 32, 3, 4, 5 and 6 (not appendix, this lesson will not be on the midterm. Indifference curves: show the combinations of goods that will offer the consumer the same amount of utility (happiness, thus, they are indifferent to which option they choose. Indifference curves that are further from the origin provides more utility, and are therefore preferred. A consumer can maximize their utility by consuming the levels defined at a point on the highest indifference curve that just touches the budget constraint. Mu (good x) / mu (good y) = price (good x) / price (good y) Mu (good x) / price (good x) = mu (good y) / price (good y) Effects of a price change: a price change will cause two separate effects; the substitution effect and the income effect, the overall impact is ambiguous.

Get access

Grade+
$40 USD/m
Billed monthly
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
10 Verified Answers
Class+
$30 USD/m
Billed monthly
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
7 Verified Answers

Related textbook solutions

Related Documents

Related Questions