00:01
Consumer equilibrium using indifference curves refers to a situation where a consumer maximizes their satisfaction given their limited budget constraint.
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Indifference curves are graphical representations that help illustrate this concept.
00:15
An indifference curve shows all the combinations of two goods that provide the consumer with the same level of satisfaction.
00:21
Consumer preferences are typically assured to exhibit certain characteristics such as one, monotonicity, two, not excuse me, monotonicity, more of good is more of a good is preferred to less.
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Number two, non satiation.
00:46
Consumers always want more of at least one good and are never satisfied.
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Excuse me, never satiated.
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Number three, transitivity.
01:05
If a is preferred to b and b is preferred to c, then a is preferred to c.
01:09
Consumer equilibrium occurs where the highest attainable indifference curves is tangent to the budget constraint line.
01:17
At this point, the consumer is allocating their budget in a way that the last dollar spent on each good provides the same marginal utility...