Indifference Curve Puns

Assume that non-addictive goods have diminishing marginal utility, while addictive goods have increasing marginal utility.

Indifference curve for two non-addictive goods is convex to the origin. Indifference curve for two addictive goods, I believe, would be concave to the origin.

But what would indifference curve for one non-addictive and one addictive good look like?

Just learning now in my Microeconomics course about "indifference curves." It's interesting to see the relationships between 2 different goods and how a consumer's spending habits on one might affect the other. It's great information for an aspiring marketer like me to know where to put ad spend if I'm trying to get consumers to substitute a good for one I'm marketing. (And which goods to include in upsells)

I'm wondering where I can find real, actual data utilizing indifference curves?

Ideally, in my mind, I envision a site where you enter a keyword such as "coffee" and up pops all the positive and negative indifference curves for goods that have a relationship with coffee. Does anything like this exist?

If not, is there ANY place I can find real data utilizing indifference curves? Free or paid

In every indifference curve example, they always show 3 curves of indifference for x and y. Why is this, shouldn't there just be 1?

Encountered this in Varian's undergraduate micro textbook. The answer is true but he didn't give further explanation other than, "it just can't cross another distinct indifference curve".

I’ve been self studying microeconomic as a way to have something to do while we’re all stuck inside. I’ve had a hard time wrapping my head around the utility maximizing. I understand setting U as an absolute and than Writing the function as a function for either Y or X. But to the calculate the slope of the line. Is it simply MUx/MUy of the original utility funcion, or do I do the derívate from the indifference line?

Hope this makes any sense Thanks!

Hi guys, I seem to be running into some fairly basic indifference curve problems and I am confused as to how to plot two different curves when it seems like there should be just one, but I could be missing something.

The question is, "Randy always uses 2 teaspoons of sugar in his cup of tea", and "Bob loves money, but dislikes work" How do I go about plotting these on an indifference curve? TIA.

Hey I'm not sure if this is the right place to ask, but I wouldn't like to ask for help from people who unironically believe the free-market is holy and perfect (I'm referring to r/Economics). So here we are, I hope this doesn't violate any rules.

So I've been trying to get into Neoclassical economic theory and I've found Steve Keen's Debunking Economics, which provides arguments against Necolassical theory as well as gives a brief insight into every one of their theories. This is all good and all, but why am I here then? Well I got stuck at the first point (literally), that is, understanding the consumer theory and furthermore the indifference curve. In the next paragraph I'll attempt to explain what I understand from it.

So our consumer has a set of preferences and he/she can rationally decide whether she gets less/more/equal 'utility' from consuming 2 different commodities. At first they tried to quantify utility but since it's really subjective, they had to turn to the aforementioned method. Hence the only thing they could do is on the 'utility mountain' draw countour lines across points of equal utility. And, well here I am.

So my questions would be as follows:

1. What determines how many indifference curves there are? I know they come from these contour lines, but shouldnt you be able to draw an infinite amount of them? (eg. one that connects points of 0.1,0.01,0.001 utility etc)
2. How do they arrive at the '2D' perspective (only displaying 2 commodities on the graph) from the '3D' perspective (displaying the utility scale as well on the graph)?
3. Could someone explain to me what the actual fuck happens at the Hicksian Demand Curve? (This one is not that important, I'm more interested in the previous two.)

So I think my biggest problem is that I'm not good at maths but even w/ the maths Wikipedia provides I couldnt figure these questions out, so guess I'm just really meh. Thanks for reading and have a good day, any answers would be greatly appreciated!)

PS: If this violates any rules just delete the post, I have no idea where to post these questions so I'm trying it here.

3. Susan has the following utility function U(x,y) = xy, where x represents food and y represents other goods. Susan has £20 (budget m) to spend on these two goods. Suppose that the initial price of x (Px) is £1 per unit, and that of y (Py) is £1 per unit. Note that MUx=y and MUy=x.

(i) How many units of x and y will Susan purchase? Assuming that Px varies and m and Py stay constant at the values £20 and £2, respectively, what is the individual demand function for x? (10 marks)

(ii) What are the characteristics of the individual demand function for x? What is its aggregate counterpart, and what is its economic importance? (10 marks)

I have answered part i concluding that it would be 10 units of x and ten units of y, weird question both cost the same also are give the same utility so you would think you could buy any said amount of each but I'm implying they are complements as their is no substitute to food. Also for the next question in part ii did MRS = price ratio ended up with y/x = Px/2... eventually found out that xPx = 10 however this is more of a revenue function as its the price of x multiplied by quantity of x. I don't know how to make it an "individual demand function".

Also, I'm stuck on part ii no clue on any of it never heard about aggregate demand in micro. For the question before it the characteristics would be individual demand shows the level of quantity of a good at a given set price????? and economic importance of aggregate demand gives you an idea of the whole market as opposed to just the demand of food which is a small bit of the market??

Quite a mouthful to read, help would be greatly appreciated. Thanks :)

Hi all,

I'm doing a problem set right now, and I need to draw indifference curves for 2 different quantities of the same good. For context, the question is essentially "carrots are sold in packs of 5 from location 1, and packs of 3 from location 2. You can only go to one location. Draw 2 indifference curves to represent your preferences". Where I'm struggling is that, on a graph, connecting, say, 5 on the Y axis with 3 on the X axis would imply that I'm indifferent to a combination of the 2, but combinations of the 2 are impossible. Is there a common representation for this type of problem that I'm missing?

Thanks!

Edit: Just to clarify, the Y axis in my example was Quantity of Carrots from Location 1, and my X axis was Quantity of Carrots from location 2.

Can someone please show an example for an indifference curve for substitute goods (example tea and coffee). The question is

“If the price of tea increases should I buy more coffee? carefully explain using income and substitution effects you should use a diagram to explain your answer”

can someone help me draw these corner solutions ?

Ms. Smith enjoys coffee (C) and tea (T) according to the function U (C, T ) = 3C + 4T .

1. (a) What does her utility function say about her marginal rate of substitution (MRS) of coffee for tea? What do her indifference curves look like?

2. (b) If coffee and tea cost 3 pounds each and Ms. Caffeine has 12 pounds to spend on these products, how much coffee and how much tea should she buy to maximize her utility? Would she buy any coffee if she had more money to spend?

3. (c) How would her consumption change if the price of coffee fell to 2 pounds?

How do i sketch a good vs bad (good on X axis , bad on Y axis) indifference curve where the consumer has convex preferences. I understand that the slope should be positive but cant figure out if the MRS is diminishing or increasing. How do I go about drawing indifference curves given the types of goods and convex preferences?

Hi,

So I’m trying to finalise my graph and would just like someone to check that it is correct and makes sense.

https://imgur.com/gallery/IyJWKQ4

I’ve ensured the IC will never cross eachother, and showed the effects of substitution and income.

I have also endured the 2 BC are tangential at difference points on IC1.

Thanks!

Link to the picture: http://imgur.com/KH7QhQZ

How can we drive Demand Curves from Indifference Curves?

Hey guys, struggling to figure out how to actually draw an IC. Here's a specific question

u(x,y) = x^1/2 + y^1/2

i) Find the gradient and MRS, and evaluate at points (x,0) and (0,y) My answers at (x,0): Gradient = (1/(2*x^1/2 ), infinity) and MRS = 0 (not 100% sure if these are correct)

ii) Using answers above sketch an IC corresponding to u.

How would you then draw it? Do you just draw the gradient vector at (x,0) draw a line orthogonal to it (where MRS =0) and just draw a convex curve and hope it fits?

Thanks

I am being given the following example -

Jim spends his entire food budget on the following two goods - Ice Cream & Fruit.

Draw an indifference curve to map Jim's preferences.

I don't understand how I'm supposed to draw an indifference curve without having data on his preferences?

Would really appreciate your help! Thanks :)

Given question:

Let Al have the utility function given by

U = y1y2.

Find the slope of Al’s indifference curve, dy2/dy1, for U=20. Observe that the slope is independent of U, and hence independent of the particular value of utility.

My work:

So I solve for y2 as a function of y1 in order to differentiate with respect to y1:

y2 = U/y1

And then differentiate:

dy2/dy1 = -U/(y1)^2

For U=20, then the slope is -20/(y1)^2. Yet, I’m getting tripped up by the last comment in the question, about observing that the slope is independent of U. I know it is, because that’s how indifference curves work. But mathematically, isn’t the 20 of some significance to the slope? How should I interpret the slope of the indifference curve with respect to the final comment? Would it instead be -1/(y1)^2?

Is it not accurate that an indifference curve for perfect substitutes would have the same slope as the budget constraint? It seems that, if two goods are perfect substitutes, a consumer should always purchase the cheaper one, no?

I am a proud owner of a Nexus 5X (2 months now) but lately I am feeling uninspired by my purchase because whenever I bump into someone with a Nexus they always have the 6P and they love it. I really really like the 5X for its hardware(camera), software and screen size. My question is, would switching to the 6P be an upgrade worth investing in? I want do a user experience based cross benefits analysis, between the two devices. Is the extra dollar value spent for the 6P worth it psychologically, emotionally and is the extra $$$ saved by going for 5X a better life savvy purchase?

Randy Ratpack hates studying both economics and history. The more time he spends studying either subject, the less happy he is. But Randy has strictly convex preferences. Sketch an indifference curve for Randy where the two commodities are hours per week spent studying economics and hours per week spent studying history. Will the slope of an indifference curve be positive or negative?

I'm wondering why these are not perfect substitutes with a constant slope linear indifference curve. The answer shows a curved indifference curve. However, why would it not be linear? Shouldn't (6,0) indifferent to (1,5), (4,2) etc. since he just wants to minimize his hours of studying? Any explanation helps thanks.

So I have had a test recently where I had to determine the price of the item. The only thing that was given to us was the elasticity, the consumers money (or wealth) and the indifference curve (perfect complements).
I know how to determine the price using the elasticity and the demand curve, but i dont' know if it's possible to determine a demand curve form an indifference curve.