We may now consider a few examples of preferences in order to throw some light on different types of preferences and optimal choice in each case. 1. Perfect Substitutes: In Fig 6.5 we show three possible situations. If p2 > p1, then the slope of the budget line is less than that of the indifferences […]
Examples of Consumer Preferences | Microeconomics
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Examples of Consumer Preferences | Microeconomics
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Here is a list of examples of consumer preferences. 1. Perfect Substitutes: Two goods are perfect substitutes if the consumer is ready to substitute one for the other at a constant rate, or, to be more specific, if the consumer is willing to substitute the goods on a one-to-one basis. Suppose a consumer uses both […]