5. What is Behind Indifference Curves? An Introduction to Preferences.

In this video, I introduce the concept of indifference curves along with some basic assumptions that basic microeconomic theory makes about preferences.

This is the first in my sequence on Foundations of Consumer Behavior.


Check out a description of my teaching activities here:

www.tonycookson.com/teaching

Check out a list of the videos in this series (organized by topic) here:

http://blog.thisyoungeconomist.com/p/learn-microeconomics.html

Category:

Education

Tags:

• indifference curves

[rocksuave]

Great video, I'm doing higher level micro and my lecturer keeps throwing equations at us to explain the properties, so this has cleared up a lot for me.. Thankyou!!!

Question: Can you please define the "reflexive" property mentioned in the subtitles at 8:31? How is it related to the transitivity assumption? Thankyou!

[intromediateecon]

@rocksuave I think you mean the subtitles at 3:54. I could have been more complete with that note. I meant to say that it violates the reflexive property of the indifference relation ~. When we are posed with the choice of bundle A or bundle A (again), we need to assume indifference. That is, A ~ A (this is what it means for ~ to be reflexive). Nontransitive preferences (through the argument I made in the video) violate this reflexivity of ~.

[SalsaTiger83]

Does the preference of mixed point hold in higher dimensions?

[intromediateecon]

@SalsaTiger83 Yes. Great Question! This would be the intuitive way for us to think about "convex preferences" no matter how many goods we have. It is harder to graph, but here's the math.

Think of a bundle w=(w1,w2, ..., wk) that a consumer likes just as well as z=(z1,z2,...,zk). Given these bundles, strictly convex preferences means that for a number t strictly between 0 and 1, the bundle t*w+(1-t)*z is strictly preferred to both z and w.

[jahangir911]

really love your videos. Very helpful, thank you. I am at London School of Economics and this is really helping me. I think your videos are really helpful

[rumourill]

Excellent... Which textbook do you use please?

[pepteamsergi09]

Studying for my final... It's a life saver .. ty!!!

[makeiteasyable]

thank you

[dbjaqy1]

i think he means indifference curves are like contour lines on a topographic map

[babymamadrama101]

awesome video!! thanks for your help!

[EyeAmTheIlluminati]

@intromediateecon I was kidding with the mountain man comment because you said in another video that you went to school in Montana. These videos are actually very helpful for my Micro class in which I've been slacking off. If I manage to get a C or better on my test on Tuesday, then I'll be sure to send a thank you because I haven't gone to class once, haven't opened the book, and haven't taken a single quiz or done a single homework assignment.

[intromediateecon]

@EyeAmTheIlluminati I'm a "random mountain man"? Funny. You raise an interesting question about the marginal value of a top economics program. I disagree with the "nothing more" part of your statement, but the selection of good students on prestige is an big part of what top programs do.

[EyeAmTheIlluminati]

@jahangir911 Lol! You go to the great economics school in the world and you are learning basic microeconomic concepts from a random mountain man YouTube? Further proof that elitist colleges provide nothing more than social prestige