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Exploring Utility curves in Consumer Theory with Graphical Illustrations

Delve into the concept of utility curves in consumer theory through graphical illustrations. Compare risk averse versus risk neutral consumer preferences. Understand the relationship between total utility, income, and consumer choices.

brian-hartman
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Exploring Utility curves in Consumer Theory with Graphical Illustrations

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  1. Graphical illustration ( risk averse) P TUd > TUw As Mud curve is to left of MUw curve Pd MUw Pw MUd Qw Qd O Ltrs of Water / Crts of Diamond.

  2. Total utility of income Utility U3 c TU b U2 x U4 a U1 Income O 5,000 8,000 10,000 15,000

  3. Risk neutral consumer Utility TU y Income O

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