User:Forich/draft article on Utility new section: Difference between revisions

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Created page with ' {{userspace draft}} The consumer is willing to give up some bananas to get an additional increment of some oranges.'
 
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Suppose John is about to consume 4 bananas and 1 orange this week. He is willing to give up some bananas to get an additional increment of some oranges. A decision scientist asks John how many bananas will he give up to get just one orange. John knows that he will be better off by trading one or two bananas for the extra orange; he will be just as well as he is now by trading three bananas for the extra orange; and he will be worse off by trading four or more bananas for the extra orange.
The consumer is willing to give up some bananas to get an additional increment of some oranges.
 
The decision scientist observes the response of John's instrospection and concludes that letting go three bananas is what would make John indifferent between the new and the old situations. He is indifferent between consuming (bananas,oranges) = (4,1) and consuming (bananas, oranges) = (1,2).