Chapter 21

What did you find most confusing? 

The Theory of Consumer Choice - The concept of indifference curves was hard to understand at first, but I feel comfortable with the explanations and the relationship between the indifference curves.  I would say the four properties of the indifference curves and the differences between them were confusing for me. 

What do you think about the concept of indifference curves in the context of budget constraints? 

It is an interesting concept that the slope of budget constraints equals the relative price of goods. But overall makes sense to me.

Does the concept of indifference curves add to your understanding of demand curves? 

Yes, you buy what you can pay for and sometimes you have to choose one product over another. Which effects the demand curve of markets.

The existence of prices and income clearly leads to budget constraints.  Do you think about trade-offs for large purchases (ie a car payment versus rent/mortgage)? I do not think about trade offs right now, I am paying the bills and getting through college. I have no car payment or mortgage payment. Vehicle is paid off and I rent. 

How about small purchases?  Trade offs for smaller purchases, good healthy food for a healthy body, entertainment for quality of life.

Does timing matter (probably you aren't purchasing both a car and a house at the same time)?  

Timing matters, typically a consumer is not going to purchase high dollar items at the same time and will wait until one is affordable. Budget timing. 

How does the concept of indifference curves inform your thinking about purchases? To be honest it probably will not effect and or inform my thinking when I am making purchases.