Where do Indifference Curves come from? Utility maximization with 3D pictures.
Matt Birch
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Where do Indifference Curves come from? Utility maximization with 3D pictures.
5 555 просмотров · 7 лет назад
Matt Birch
6,03 тыс. подписчиков
5 555 просмотров · 7 лет назад
I show graphically how to maximize utility, subject to a budget constraint. I introduce the idea of indifference curves and then show where the IC's come from and why the budget constraint needs to be tangent to them. All rendered out in 3 dimensions. It is kind of nifty. It is intended to give the intuition behind the tangency of ICs and BCs.