scholarly journals Indifference Curve Analysis: The Correct and the Incorrect

2014 ◽  
Vol 5 (4) ◽  
pp. 7-43
Author(s):  
Jose Antonio Manuel Aguirre Sotelo ◽  
Walter E. Block
Keyword(s):  
Indifference Curve ◽  
Curve Analysis ◽  
Mixed Result ◽  
Optimal Point ◽  
Correct Analysis ◽  
Corner Solution ◽  
North Eastern ◽  
Economics Profession

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.

Explaining the behaviour of individuals: theory of consumer choice.

2021 ◽  
pp. 11-25
Author(s):  
Berkeley Hill
Keyword(s):  
Consumer Choice ◽  
Utility Theory ◽  
Consumer Behaviour ◽  
Indifference Curve ◽  
Curve Analysis ◽  
Reasonable Assumption ◽  
Purchasing Power

Abstract This chapter first introduces the concepts of utility, margin, and free goods. It then discusses two theories to explain consumer behaviour: (i) utility theory; and (ii) indifference theory. Both theories make the reasonable assumption that the objective the consumer has in mind is to get the greatest amount of satisfaction possible from the limited amount of purchasing power he or she possesses. The utility theory, while simple in concept, contains some difficulties which the second approach, using indifference curve analysis, overcomes. The concepts are illustrated with examples involving products such as bread, cigarettes, beer and milk.

Can Agglomeration Economies Explain Why People are Leaving Large Cities?

1981 ◽  
Vol 13 (2) ◽  
pp. 225-230 ◽  
Author(s):  
C B Hawley ◽  
M S Fogarty
Keyword(s):  
General Equilibrium ◽  
Large City ◽  
Indifference Curve ◽  
Agglomeration Economies ◽  
Curve Analysis ◽  
Elasticity Of Substitution ◽  
Small Cities ◽  
Environmental Goods ◽  
Large Cities ◽  
Capital Intensive

In this journal, Vining and Kontuly recently posed the question “Is out-migration from large cities consistent with agglomeration economy advantages that these cities are commonly said to enjoy”. Previous authors who have responded to this query have supplied an indifference curve analysis that examines the trade-off individuals face between income and urban size (environmental goods). This paper instead provides a general equilibrium model that explicitly incorporates urban agglomeration economies to examine the conditions under which out-migration and those economies may simultaneously exist. Under the assumption that the elasticity of substitution between the outputs of large and small cities is unity, four cases can be distinguished. Our conclusion is that labor will unambiguously migrate from large cities with an increase in agglomeration economies only if large city goods are income-inelastic and large cities are relatively capital-intensive. The more reasonable hypothesis, that out-migration is a result of shrinking productivity advantages of large cities, can also be investigated by means of this general equilibrium framework.

scholarly journals Exchange Rates And Consumer Choice: Compensating Government Workers For Declines In The Dollar

2011 ◽  
Vol 5 (1) ◽  
pp. 13
Author(s):  
Robert N. Horn ◽  
Robert T. Jerome, Jr.
Keyword(s):  
Exchange Rates ◽  
Consumer Choice ◽  
Indifference Curve ◽  
Curve Analysis ◽  
The Other ◽  
Currency Exchange ◽  
Currency Exchange Rates ◽  
Or Groups ◽  
Current Article ◽  
Government Workers

Traditional indifference curve theory is limited to explaining consumer choice between two goods or groups of goods; however, in the latter case the groups are seldom well-defined or relevant. The current article evaluates consumer adjustment between two relevant, well-defined groups of commodities, one denominated in U.S. dollars, the other in Deutsch marks. Changes in currency exchange rates and resultant changes in consumer behavior are easily analyzed using traditional indifference curve analysis. Additionally, compensation schemes customarily used to offset fluctuations are shown not to be welfare neutral.

Which Data to Meta-Analyze, and How?

2019 ◽  
Vol 227 (1) ◽  
pp. 64-82 ◽  
Author(s):  
Martin Voracek ◽  
Michael Kossmeier ◽  
Ulrich S. Tran
Keyword(s):  
Empirical Research ◽  
Meta Analysis ◽  
Curve Analysis ◽  
Research Progress ◽  
Primary Data ◽  
Statistical Procedures ◽  
Graphical Displays ◽  
Primary Data Analysis ◽  
Meta Analyses ◽  
Data Analytic

Abstract. Which data to analyze, and how, are fundamental questions of all empirical research. As there are always numerous flexibilities in data-analytic decisions (a “garden of forking paths”), this poses perennial problems to all empirical research. Specification-curve analysis and multiverse analysis have recently been proposed as solutions to these issues. Building on the structural analogies between primary data analysis and meta-analysis, we transform and adapt these approaches to the meta-analytic level, in tandem with combinatorial meta-analysis. We explain the rationale of this idea, suggest descriptive and inferential statistical procedures, as well as graphical displays, provide code for meta-analytic practitioners to generate and use these, and present a fully worked real example from digit ratio (2D:4D) research, totaling 1,592 meta-analytic specifications. Specification-curve and multiverse meta-analysis holds promise to resolve conflicting meta-analyses, contested evidence, controversial empirical literatures, and polarized research, and to mitigate the associated detrimental effects of these phenomena on research progress.

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