If we have all the indifference curves of an individual (his "indifference map
"), each one corresponding to a certain level of utility, we can theoretically calculate which bundle of goods that consumer will choose, given his budget and the prices of the goods, in order to maximize his utility.
Remember deriving that demand curve with the indifference map
held constant and rotating the budget constraint?
He put the origin of a "yellow individual's" indifference map
in the NE corner of the board and a "white individual's" origin in the SW.
A significant obstacle in microeconomics for many students is the connection between a utility function and the indifference map
Consider in Figure 2 the two half-planes defined by the line [Mathematical Expression Omitted], following the major axis of the indifference map
of voter [Mathematical Expression Omitted] and passing through ([Mathematical Expression Omitted], 0).
As is well known, each point along the demand function corresponds to a single point along the indifference map
where utility is maximized.
Edgeworth, Marshall's colleague and the inventor of the indifference map
and the contract curve.
"The Public's Indifference Map
between Inflation and Unemployment: Empirical Evidence from the Nixon, Ford, Carter and Reagan Presidencies." Public Choice, 60 (January, 1989), 71-85.
It should be noted that the relationships shown in (7) and (8) hold anywhere on the indifference map
. This should be contrasted with results elsewhere in the literature which relate measures of risk aversion to curvature only at one point in [W.sub.1!, [W.sub.2!
Rothbard clearly thinks that it does; in remarking on the use of indifference maps
in contemporary mathematical economics, he says, "The crucial fallacy is that "indifference" cannot be a basis for action" (rothbard 2004, p.
Because there is a plurality of egalitarian values which cannot be maximized simultaneously but which can be traded off in a rational fashion using multidimensional indifference maps
and possibility frontiers.
The ||Theta~.sub.i~ alter the consumers' indifference maps
, thus capturing the effect of otherwise unobservable quality changes.