How to read this

Left, a utility function ; right, . The heights differ, but the indifference curve through is the same, and every pair of bundles is ranked the same way, as long as is increasing. Utility only orders bundles.

  • Try other transformations: the indifference curves and do not move. With V = −U the ranking flips.
  • Along the tangent line at , a quasi-concave is highest at (Theorem 1). Choose Bowed out to see it fail.

Utility function

Transformation

Bundles

Two different utility functions representing the same preferences

Ranking

    Convexity, Theorem 1 and the MRS