<p>I encountered this question in Microeconomics by Pindyck and Rubinfeld. </p>

<p>The question says that <strong>"Suppose Jones and Smith have each decided to
allocate $1000 per year to an entertainment budget
in the form of hockey games or rock concerts. They
both like hockey games and rock concerts and will
choose to consume positive quantities of both goods.
However, they differ substantially in their preferences
for these two forms of entertainment. Jones prefers
hockey games to rock concerts, while Smith prefers
rock concerts to hockey games."</strong></p>

<p>We are asked to draw indifference curves for both of them. </p>

<p>A solution manual showed that the indifference curves should be convex to the origin with different degrees of steepness. However, I believe that the curves should be concave to the origin as convex curves show a tendency to diversify one's bundle, which is certainly not the case here. Also, convex curves at some point will say that one of them is ready to leave more of what he prefers more to get just <span class="math-container">$1$</span> unit of what he prefers less. That too seems a contradiction to me. I am of the belief that here the indifference curves should be concave to the origin with different degrees of steepness for the both the consumers.</p>

<p>Kindly help me reach the right answer.</p>

CC BY-SA 4.0
2020-01-15T09:54:55.650Z
"which is certainly not the case here" Why?
Giskard
CC BY-SA 4.0
2020-01-15T11:13:51.480Z
Because it has been mentioned that they like one good more than the other, which shows that when faced with a choice to diversify their bundle, they would rather not do that.
Harsh Sharma
CC BY-SA 4.0
2020-01-15T14:33:28.803Z
Do you have a favorite TV show? You like that better than other shows, right? Is that the only TV show you ever watch? You do not "diversify", never voluntarily watch watch anything else ever?
Giskard
CC BY-SA 4.0
2020-01-15T14:34:48.867Z
Granted, the "prefers hockey games to rock concerts" etc. phrasing of the exercise is quite unfortunate, but it is made clear that they do in fact diversify, they will "*consume positive quantities of both goods*".
Giskard
CC BY-SA 4.0
2020-01-16T08:20:17.230Z
@Giskard So that ultimately means that the books, inspite of the unfortunate phrasing, wants us to look towards the "general" phenomenon of how individuals make their preferences?
Harsh Sharma
CC BY-SA 4.0
2020-01-16T11:03:52.507Z
I am not sure what you mean by that; nor did I write the book. My interpretation is that the utility functions are similar to asymmetric Cobb-Douglas functions.
Giskard
<microeconomics><consumer-theory>
On shapes of indifference curves
Harsh Sharma
# On shapes of indifference curves

(Asked by: username_0 on 2020-01-15)

I encountered this question in Microeconomics by Pindyck and Rubinfeld.

The question says that **"Suppose Jones and Smith have each decided to
allocate $1000 per year to an entertainment budget
in the form of hockey games or rock concerts. They
both like hockey games and rock concerts and will
choose to consume positive quantities of both goods.
However, they differ substantially in their preferences
for these two forms of entertainment. Jones prefers
hockey games to rock concerts, while Smith prefers
rock concerts to hockey games."**

We are asked to draw indifference curves for both of them.

A solution manual showed that the indifference curves should be convex to the origin with different degrees of steepness. However, I believe that the curves should be concave to the origin as convex curves show a tendency to diversify one's bundle, which is certainly not the case here. Also, convex curves at some point will say that one of them is ready to leave more of what he prefers more to get just $1$ unit of what he prefers less. That too seems a contradiction to me. I am of the belief that here the indifference curves should be concave to the origin with different degrees of steepness for the both the consumers.

Kindly help me reach the right answer.

**Tags:** microeconomics, consumer-theory
> **Comments:**
> **username_1**: "which is certainly not the case here" Why?  
> **username_0**: Because it has been mentioned that they like one good more than the other, which shows that when faced with a choice to diversify their bundle, they would rather not do that.  
> **username_1**: Do you have a favorite TV show? You like that better than other shows, right? Is that the only TV show you ever watch? You do not "diversify", never voluntarily watch watch anything else ever?  
> **username_1**: Granted, the "prefers hockey games to rock concerts" etc. phrasing of the exercise is quite unfortunate, but it is made clear that they do in fact diversify, they will "*consume positive quantities of both goods*".  
> **username_0**: @Giskard So that ultimately means that the books, inspite of the unfortunate phrasing, wants us to look towards the "general" phenomenon of how individuals make their preferences?  
> **username_1**: I am not sure what you mean by that; nor did I write the book. My interpretation is that the utility functions are similar to asymmetric Cobb-Douglas functions.  

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