{“appState”:{“pageLoadApiCallsStatus”:true},”articleState”:{“article”:{“headers”:{“creationTime”:”2016-03-26T07:07:56+00:00″,”modifiedTime”:”2016-03-26T07:07:56+00:00″,”timestamp”:”2022-09-14T17:44:31+00:00″},”data”:{“breadcrumbs”:[{“name”:”Business, Careers, & Money”,”_links”:{“self”:”https://dummies-api.dummies.com/v2/categories/34224″},”slug”:”business-careers-money”,”categoryId”:34224},{“name”:”Business”,”_links”:{“self”:”https://dummies-api.dummies.com/v2/categories/34225″},”slug”:”business”,”categoryId”:34225},{“name”:”Economics”,”_links”:{“self”:”https://dummies-api.dummies.com/v2/categories/34238″},”slug”:”economics”,”categoryId”:34238}],”title”:”How to Draw a Utility Function”,”strippedTitle”:”how to draw a utility function”,”slug”:”how-to-draw-a-utility-function”,”canonicalUrl”:””,”seo”:{“metaDescription”:”Suppose that you want to compare bundles that are on different levels of utility. Easy! You draw a set of indifference curves moving away from the origin. Each “,”noIndex”:0,”noFollow”:0},”content”:”<p>Suppose that you want to compare bundles that are on different levels of utility. Easy! You draw a set of indifference curves moving away from the origin. Each individual curve has the same level of utility along the curves, and each curve expresses a higher level of utility the further away from the origin it is!</p>\n<div class=\”imageBlock\” style=\”width:441px;\”><img src=\”https://www.dummies.com/wp-content/uploads/504242.image0.jpg\” height=\”400\” alt=\”Indifference curves farther away from the origin yield higher utility for Bob.\” width=\”441\”/><div class=\”imageCaption\”>Indifference curves farther away from the origin yield higher utility for Bob.</div></div>\n<p class=\”Tip\”>The great thing about this depiction is that if you connect a line going through the indifference curves, and the indifference curves are derived from well-behaved preferences, any point on the new line is part of a nice, well-behaved utility function. The following figure shows this, where the new line goes from the origin through the indifference curves.</p>\n<div class=\”imageBlock\” style=\”width:453px;\”><img src=\”https://www.dummies.com/wp-content/uploads/504243.image1.jpg\” height=\”400\” alt=\”Bob gets more utility each time he moves to a higher indifference curve.\” width=\”453\”/><div class=\”imageCaption\”>Bob gets more utility each time he moves to a higher indifference curve.</div></div>\n<p>But, you may ask, what if all those points are different combinations of goods? After all, imagine that you’ve shown that for indifference curve 1, Bob will be indifferent between the bundle of three cups of tea and four cups of coffee and the bundle of five cups of tea and two cups of coffee, but prefers the bundle on indifference curve 2 of six cups of tea and two cups of coffee. What is this telling you?</p>\n<p>The answer is something very important about utility functions, which is that if preferences are well-behaved, almost anything that satisfies those rules could be part of a utility function! (In fact, a near infinite number of possible, consistent, utility functions could satisfy those rules. You just wouldn’t know which particular one any individual consumer is on until his behavior reveals it in some way.)</p>\n<p class=\”Remember\”>The absolutely crucial point to take away is that <i>well-behaved preferences make well-behaved utility functions.</i></p>”,”description”:”<p>Suppose that you want to compare bundles that are on different levels of utility. Easy! You draw a set of indifference curves moving away from the origin. Each individual curve has the same level of utility along the curves, and each curve expresses a higher level of utility the further away from the origin it is!</p>\n<div class=\”imageBlock\” style=\”width:441px;\”><img src=\”https://www.dummies.com/wp-content/uploads/504242.image0.jpg\” height=\”400\” alt=\”Indifference curves farther away from the origin yield higher utility for Bob.\” width=\”441\”/><div class=\”imageCaption\”>Indifference curves farther away from the origin yield higher utility for Bob.</div></div>\n<p class=\”Tip\”>The great thing about this depiction is that if you connect a line going through the indifference curves, and the indifference curves are derived from well-behaved preferences, any point on the new line is part of a nice, well-behaved utility function. The following figure shows this, where the new line goes from the origin through the indifference curves.</p>\n<div class=\”imageBlock\” style=\”width:453px;\”><img src=\”https://www.dummies.com/wp-content/uploads/504243.image1.jpg\” height=\”400\” alt=\”Bob gets more utility each time he moves to a higher indifference curve.\” width=\”453\”/><div class=\”imageCaption\”>Bob gets more utility each time he moves to a higher indifference curve.</div></div>\n<p>But, you may ask, what if all those points are different combinations of goods? After all, imagine that you’ve shown that for indifference curve 1, Bob will be indifferent between the bundle of three cups of tea and four cups of coffee and the bundle of five cups of tea and two cups of coffee, but prefers the bundle on indifference curve 2 of six cups of tea and two cups of coffee. What is this telling you?</p>\n<p>The answer is something very important about utility functions, which is that if preferences are well-behaved, almost anything that satisfies those rules could be part of a utility function! (In fact, a near infinite number of possible, consistent, utility functions could satisfy those rules. You just wouldn’t know which particular one any individual consumer is on until his behavior reveals it in some way.)</p>\n<p class=\”Remember\”>The absolutely crucial point to take away is that <i>well-behaved preferences make well-behaved utility functions.</i></p>”,”blurb”:””,”authors”:[{“authorId”:8960,”name”:”Lynne Pepall”,”slug”:”lynne-pepall”,”description”:” <p><b>Lynne Pepall</b>, PhD, is a professor of economics at Tufts University. She has taught microeconomics at both graduate and undergraduate levels since 1987.</p> <p><b>Peter Antonioni</b> is a senior teaching fellow at the Department of Management Science and Innovation, University College, London, and coauthor of <i>Economics For Dummies</i>, 2nd UK Edition.</p> <p><b>Manzur Rashid</b>, PhD, is a lecturer at New College of the Humanities, where he covers second-year micro- and macroeconomics.</p>”,”hasArticle”:false,”_links”:{“self”:”https://dummies-api.dummies.com/v2/authors/8960″}},{“authorId”:8961,”name”:”Peter Antonioni”,”slug”:”peter-antonioni”,”description”:” <p><b>Daniel Richards, PhD, </b>is a professor of economics at Tufts University. He received his PhD from Yale University. <p><b>Manzur Rashid, PhD, </b>has taught economics at University College London and Cambridge University. <p><b>Peter Antonioni </b>is a senior teaching fellow at University College London. “,”hasArticle”:false,”_links”:{“self”:”https://dummies-api.dummies.com/v2/authors/8961″}},{“authorId”:8962,”name”:”Manzur Rashid”,”slug”:”manzur-rashid”,”description”:” <p><b>Daniel Richards, PhD, </b>is a professor of economics at Tufts University. He received his PhD from Yale University. <p><b>Manzur Rashid, PhD, </b>has taught economics at University College London and Cambridge University. <p><b>Peter Antonioni </b>is a senior teaching fellow at University College London. “,”hasArticle”:false,”_links”:{“self”:”https://dummies-api.dummies.com/v2/authors/8962″}}],”primaryCategoryTaxonomy”:{“categoryId”:34238,”title”:”Economics”,”slug”:”economics”,”_links”:{“self”:”https://dummies-api.dummies.com/v2/categories/34238″}},”secondaryCategoryTaxonomy”:{“categoryId”:0,”title”:null,”slug”:null,”_links”:null},”tertiaryCategoryTaxonomy”:{“categoryId”:0,”title”:null,”slug”:null,”_links”:null},”trendingArticles”:null,”inThisArticle”:[],”relatedArticles”:{“fromBook”:[{“articleId”:138340,”title”:”A Microeconomist’s View to Minimizing Costs within a Firm”,”slug”:”a-microeconomists-view-to-minimizing-costs-within-a-firm”,”categoryList”:[“business-careers-money”,”business”,”economics”],”_links”:{“self”:”https://dummies-api.dummies.com/v2/articles/138340″}},{“articleId”:138339,”title”:”Consumption Bundles, Utility, and Possible Sets”,”slug”:”consumption-bundles-utility-and-possible-sets”,”categoryList”:[“business-careers-money”,”business”,”economics”],”_links”:{“self”:”https://dummies-api.dummies.com/v2/articles/138339″}},{“articleId”:138336,”title”:”The Economics of Smaller Units”,”slug”:”the-economics-of-smaller-units”,”categoryList”:[“business-careers-money”,”business”,”economics”],”_links”:{“self”:”https://dummies-api.dummies.com/v2/articles/138336″}},{“articleId”:138337,”title”:”Microeconomics and the Importance of Decisions”,”slug”:”microeconomics-and-the-importance-of-decisions”,”categoryList”:[“business-careers-money”,”business”,”economics”],”_links”:{“self”:”https://dummies-api.dummies.com/v2/articles/138337″}},{“articleId”:138338,”title”:”How to Shift the Budget Constraint to Represent an Increase in Income”,”slug”:”how-to-shift-the-budget-constraint-to-represent-an-increase-in-income”,”categoryList”:[“business-careers-money”,”business”,”economics”],”_links”:{“self”:”https://dummies-api.dummies.com/v2/articles/138338″}}],”fromCategory”:[{“articleId”:284118,”title”:”Circular Economy For Dummies Cheat Sheet”,”slug”:”circular-economy-for-dummies-cheat-sheet”,”categoryList”:[“business-careers-money”,”business”,”economics”],”_links”:{“self”:”https://dummies-api.dummies.com/v2/articles/284118″}},{“articleId”:255069,”title”:”Violations and Limitations of the Economist’s Choice Model”,”slug”:”violations-and-limitations-of-the-economists-choice-model”,”categoryList”:[“business-careers-money”,”business”,”economics”],”_links”:{“self”:”https://dummies-api.dummies.com/v2/articles/255069″}},{“articleId”:255066,”title”:”The Economic Secret to Good Low-Cost Healthcare in Singapore”,”slug”:”the-economic-secret-to-good-low-cost-healthcare-in-singapore”,”categoryList”:[“business-careers-money”,”business”,”economics”],”_links”:{“self”:”https://dummies-api.dummies.com/v2/articles/255066″}},{“articleId”:255063,”title”:”Why Prices Get Sticky When the Economy Is Headed for a Recession”,”slug”:”why-prices-get-sticky-when-the-economy-is-headed-for-a-recession”,”categoryList”:[“business-careers-money”,”business”,”economics”],”_links”:{“self”:”https://dummies-api.dummies.com/v2/articles/255063″}},{“articleId”:255059,”title”:”The Economic Process of Perfect Competition”,”slug”:”the-economic-process-of-perfect-competition”,”categoryList”:[“business-careers-money”,”business”,”economics”],”_links”:{“self”:”https://dummies-api.dummies.com/v2/articles/255059″}}]},”hasRelatedBookFromSearch”:false,”relatedBook”:{“bookId”:282399,”slug”:”microeconomics-for-dummies-usa-edition”,”isbn”:”9781119184393″,”categoryList”:[“business-careers-money”,”business”,”economics”],”amazon”:{“default”:”https://www.amazon.com/gp/product/1119184398/ref=as_li_tl?ie=UTF8&tag=wiley01-20″,”ca”:”https://www.amazon.ca/gp/product/1119184398/ref=as_li_tl?ie=UTF8&tag=wiley01-20″,”indigo_ca”:”http://www.tkqlhce.com/click-9208661-13710633?url=https://www.chapters.indigo.ca/en-ca/books/product/1119184398-item.html&cjsku=978111945484″,”gb”:”https://www.amazon.co.uk/gp/product/1119184398/ref=as_li_tl?ie=UTF8&tag=wiley01-20″,”de”:”https://www.amazon.de/gp/product/1119184398/ref=as_li_tl?ie=UTF8&tag=wiley01-20″},”image”:{“src”:”https://www.dummies.com/wp-content/uploads/microeconomics-for-dummies-usa-edition-cover-9781119184393-203×255.jpg”,”width”:203,”height”:255},”title”:”Microeconomics For Dummies”,”testBankPinActivationLink”:””,”bookOutOfPrint”:false,”authorsInfo”:”<p><b data-author-id=\”8960\”>Lynne Pepall</b>, PhD, is a professor of economics at Tufts University. 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