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Indifference Curve Analysis: The Correct and the Incorrect

Oeconomia Copernicana

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Title Indifference Curve Analysis: The Correct and the Incorrect
 
Creator Aguirre Sotelo, José Antonio Manuel; Joseph A. Butt, S.J. College of Business
Loyola University New Orleans
Block, Walter E.; Joseph A. Butt, S.J. College of Business
Loyola University New Orleans
 
Subject Indifference curve; convex; concave; budget line
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Description The thesis of this paper is that when the indifference curve is concave to the origin, the optimal point on the budget line is not the corner solution on the highest (most north eastern) indifference curve, the analysis all too often offered in the literature, but, rather, somewhat paradoxically, the lowest (most south western) indifference curve. The economics profession, as articulated through the megaphone of intermediate micro economics texts, offers a mixed result in this regard. Some few do offer a correct analysis, but many do not; others ignore the issue entirely. The contribution of the present paper and the aim of our research is to provide a correction of the widespread but erroneous indifference curve analysis that appears in many of our intermediate microeconomics texts. Our methodology is one of contrast: we offer what we see as both the correct and the incorrect versions of indifference curve analysis.
 
Publisher Uniwersytet Mikołaja Kopernika w Toruniu
 
Contributor —
 
Date 2015-02-19
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
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Format application/pdf
 
Identifier http://apcz.umk.pl/czasopisma/index.php/OeC/article/view/OeC.2014.025
10.12775/OeC.2014.025
 
Source Oeconomia Copernicana; Vol 5, No 4 (2014); 7-43
Oeconomia Copernicana; Vol 5, No 4 (2014); 7-43
2353-1827
2083-1277
 
Language eng
 
Relation http://apcz.umk.pl/czasopisma/index.php/OeC/article/view/OeC.2014.025/5025
 
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