Economics Asked on July 31, 2021
Suppose my preferences are such that I like more of both goods, but only up to a
point. After I have 5 units of both goods, that’s as good as it gets, and I’m indifferent if I
get more.
how do u draw the indifference curves? it seems that any bundle with more than five units of both goods are the same, so any line in that area is useless
The area from $(0, 0)$ to $(5, 5)$ would be just like any other two-good indifference curve. Then since the area ${(x, y): x geq 5, y geq 5}$ has the same utility, they're all on the same "indifference curve" (so that's more like an "indifference area").
Not sure what the indifference curves would look like, say, at $(80, 2)$ though since you didn't specify if that's better or worse than $(5, 5)$.
Correct answer by Art on July 31, 2021
This is an example of a satiation point or bliss point. Basically you want a particular point and getting further away from this point decreases your utility. The indifference curves look like concentric circles around a specific point, in your case (5,5) is the bliss point.
Answered by Angela Shoulders on July 31, 2021
Get help from others!
Recent Questions
Recent Answers
© 2024 TransWikia.com. All rights reserved. Sites we Love: PCI Database, UKBizDB, Menu Kuliner, Sharing RPP