Consider a person whose tastes and preferences are represented by IC . Something changes his tastes and preferences and his indifference curve shifts to IC2. Good X 10 IC, 8 IC, 12 Good Y 10 IC1 is steeper than IC2. If the person starts at A and moves to B, they are giving up 2 units of X to get 2 units of Y. If the person starts at A and moves to F, they are giving up 2 units of X to get 1 unit of Y.

Consider a person whose tastes and preferences are represented by IC . Something changes his tastes and preferences and his indifference curve shifts to IC2. Good X 10 IC, 8 IC, 12 Good Y 10 IC1 is steeper than IC2. If the person starts at A and moves to B, they are giving up 2 units of X to get 2 units of Y. If the person starts at A and moves to F, they are giving up 2 units of X to get 1 unit of Y.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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