HAT Manifesto Part 1/2 - Rubric Cube - 251207 edit

 

Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed.
PART 7 Topics for Further Study
Chapter 21 of 36 The Theory of Consumer Choice
Section 5 of 26
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Because indifference curves are not straight lines the marginal rate of substitution is not the same at all points on a indifference curve.
The rate at which consumers are willing to trade between pizza and Pepsi depends on
· whether they are hungrier or thirstier
· how much pizza and Pepsi they are already consuming
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Per Figure 2, starting at combination C
· to move from combination C to combination B, must give up 100 pints of Pepsi to have 30 more pizzas
· to move from B to A, must give up 50 pints of Pepsi to have 60 more pizzas
The consumer is equally satisfied at all points on any given indifference curve.
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Because consumers prefer more consumption to less, higher indifference curves are preferred to lower ones.
A consumer can move to a higher indifference curve either because their income has gone up or prices have gone down.
In Figure 2, any point on curve I2 is preferred to any point on curve I1.
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A consumer's set of indifference curves gives a complete ranking of the
consumer's preferences.
We can use indifference curves to rank any two bundles of goods.
The indifference curves tell us point D is preferred to point A or C.
This is because point D is on a higher indifference curve than point A and C .
Note at point D the consumer can have 100 Pepsi and 95 pizzas, but at point B can have 100 Pepsi and only 40 pizzas.
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consumers prefer more consumption
shōhisha wa yori ōku no shōhi o konomu
消費者はより多くの消費を好む