Term
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Definition
| line that shows combinations of goods among which a consumer is indifferent |
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Term
| Points to the right of the indifference curve? |
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Definition
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| Points to the left of the indifference curve? |
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Definition
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| Points on the indifference curve |
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Definition
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Term
| Marginal Rate of substitution of X for Y? |
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Definition
| How much of good Y the consumer is WILLING to give up for one additional good X keepings the same utility |
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Definition
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Definition
| As the consumer gets more X, he values X less, while Y more, so he is willing to give up less Y for 1 extra X |
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Term
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Definition
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| Why is IC shaped as it is? |
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Definition
| because MRS is diminishing |
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Term
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Definition
| a series of indifference curves |
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Term
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Definition
| a line that shows the maximum amount of goods that can be bought with a given income at given prices |
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