Foundations of Economics, 8th Edition

Appendix: Indifference Curves

You are going to discover a neat idea—that of drawing a map of a person’s preferences. A preference map is based on the intuitively appealing assumption that people can sort all the possible combinations of goods into three groups: preferred, not preferred, and indifferent. To make this idea concrete, let’s ask Tina to tell us how she ranks combinations of bottled water and chewing gum.

An Indifference Curve

Figure A13.1(a) shows part of Tina’s answer. She tells us that she currently consumes 2 bottles of water and 4 packs of gum a day at point C. She then lists all the combinations of bottled water and chewing gum that she says are as acceptable to her as her current consumption. When we plot these combinations ...