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    The mid-term for ECON201 will cover material from weeks 1-4, including indifference curves and their characteristics such as never crossing and higher curves representing higher utility. It will also test the concepts of the marginal rate of substitution, which is the rate at which a consumer is willing to trade one good for another according to the slope of the indifference curve, and consumer behavior theory including individual demand, market demand, and consumer theory.

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    The mid-term for ECON201 will cover material from weeks 1-4, including indifference curves and their characteristics such as never crossing and higher curves representing higher utility. It will also test the concepts of the marginal rate of substitution, which is the rate at which a consumer is willing to trade one good for another according to the slope of the indifference curve, and consumer behavior theory including individual demand, market demand, and consumer theory.

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    7 views1 page

    Untitled

    Uploaded by

    James Goodman
    The mid-term for ECON201 will cover material from weeks 1-4, including indifference curves and their characteristics such as never crossing and higher curves representing higher utility. It will also test the concepts of the marginal rate of substitution, which is the rate at which a consumer is willing to trade one good for another according to the slope of the indifference curve, and consumer behavior theory including individual demand, market demand, and consumer theory.

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    ECON201 MID-Term Study

    Weeks 1-4 are being tested

    Indifference Curves

    Characteristics of Indifference Curves


    - From the four assumptions about consumer preferences

    1. They can be drawn


     Completeness and rank ability
    2. Curves further from the origin represent higher utility
     More is better
    3. Curves never cross
     Transitivity

    A higher indifference curve has higher utility/satisfaction

    The Marginal Rate of Substitution (MRS)

    Indifference curves describe tradeoffs.


     How much of one good you are willing to give up for one more unit of another good?
     The slope of the indifference curve captures this tradeoff.

    We call this slope the marginal rate of substitution (MRSxy)

    Describes the rate at which one is willing to trade off or substitute exactly 1 unit of good X
    for more of good Y, and be equally well off.

    Consumer Behavior

    Individual and Market Demand

    Consumer Theory

    Producer Behavior

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