Economics lessons in Montreal for McGill University.
Indifference Curves
Our Economics Tutor in Montreal will work with you for all economics courses at McGill University.
- Perfect Substitutes – goods with a constant rate of substitution
- Perfect Complements – goods consumed together in certain fixed proportions
- ‘Bads’ – a good that you dislike
- Neutral goods – a good that you don’t care about
- Satiation – an overall best bundle: too much AND too little is worse
- Utility Functions describe preferences, assigning higher numbers to more-preferred bundles. All combinations of two goods that give an individual the same level of utility lie on the same indifference curve.
- Utility is measured in ordinal and not cardinal utility. We care about which bundle is preferred and not by how much
- The more of a good you have, the more willing you are to sacrifice it to gain an additional unit of another good
Monotonic Transormations
Applying monotonic transformations to a utility function creates a new function but with the same preferences
– Transforms a set of numbers into another set; preserving the order
– We can’t work back from optimal demands for exact utility function
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Open in new tab Microeconomics Tutor McGill Lecture I
Intermediate Micro Consumer Behaviour Lecture
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