Copyright © 1995-2004 OnLineTexts.com, Inc. - All Rights Reserved
As we've noted before, consumers consume more than two goods but we can examine many of the interesting aspects of consumer choice in a world of millions of products with our simple two-good setup.
To the right we show Videos on the horizontal axis and Other Goods on the vertical axis. By Other Goods we mean money spent on everything that is not Videos. The horizontal axis is in number of Videos but the vertical axis is measured in dollar amounts. This setup lets us maintain the two-good model while acknowledging that more than two goods are consumed. It is also very convenient to have the vertical axis represent monetary units.
Copyright © 1995-2004 OnLineTexts.com, Inc. - All Rights Reserved