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Suppose people cared about two different aspects of cars: the size of the interior passenger cabin and the quality of handling of the car on
Suppose people cared about two different aspects of cars: the size of the interior passenger cabin and the quality of handling of the car on the road. Putting "cubic feet of interior space" on the horizontal axis and "speed at which the car can handle a curved mountain road" on the vertical, think about where you generally locate the following types of cars assuming that they will fall on one line in your graph: a Minivan, small Sports Car like a Porsche, and a four door Sedan. Suppose we considered three different individuals whose preferences satisfy our basic assumptions, and suppose each person owns one of the three types of cars. Suppose further that each indifference curve from one person's indifference map crosses any indifference curve from another person's indifference map at most once. (When two indifference maps satisfy this condition, we often say that they satisfy the single crossing property.) Now suppose you know person A's MRS at the Sedan is larger (in absolute value) than person B's, and person B's MRS at the Sedan is larger (in absolute value) than person C's. Who owns which car? Person A owns Person B owns Person C owns
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