Suppose you want to buy a widget. You say, "I'll pay $50 for it but not $60." You would also pay $55. But not $57.5. Narrowing the gap in this manner you ultimately realize that you no longer see a practical difference between the widget, $56.3692743, and $56.3692744. At this point wouldn't it be reasonable to say that you are indifferent between the widget and $56.3692743? In other words, the widget and the money become as though parts of a homogeneous good, like two identical units of butter.
If so, isn't indifference curve analysis reasonable?
It may be argued that even with respect to butter a choice can be made, such as "I prefer the ounce of butter on the right as opposed to on the left." But (1) you thereby choose because of an accident not what is essential to butter. And (2) what if the units of butter is behind a wall, and you don't know which spatial locations they occupy? How can you choose? And if you can't, why not consider yourself indifferent between the units?
Again it might be objected that indifference is not an economic category; only choice is. In other words, only choice has economic consequences. But my point is simply that failure to distinguish between things practically even though they are different both numerically and qualitatively causes them to be treated economically like units of homogeneous good. Am I right?
dchernik:At this point wouldn't it be reasonable to say that you are indifferent between the widget and $56.3692743?
First, I'm not sure what action you would take to demonstrate this indifference. Exchanges can't be carried out in fractions of coins. But, regardless of that difficulty, if you were truly indifferent between some amount of money and some good, what you'd do is not trade, since then you'd be putting in effort to get no more than what you had before, in your eyes. But this is indistinguishable from preferring the one you have over the other. The claim is not that no one is ever indifferent, but that indifference cannot be expressed in action.
dchernik:But my point is simply that failure to distinguish between things practically even though they are different both numerically and qualitatively causes them to be treated economically like units of homogeneous good.
The problem here is that, once you want to actually use them for some action, you are no longer indifferent. If you really don't care which pound of butter you use, you'll use the pound on top - but then you prefer the one on top because of a characteristic it has that the other doesn't - that of being easier to get to.
dchernik:Suppose you want to buy a widget. You say, "I'll pay $50 for it but not $60." You would also pay $55. But not $57.5. Narrowing the gap in this manner you ultimately realize that you no longer see a practical difference between the widget, $56.3692743, and $56.3692744. At this point wouldn't it be reasonable to say that you are indifferent between the widget and $56.3692743? In other words, the widget and the money become as though parts of a homogeneous good, like two identical units of butter.
I don't understand how the 'indifference' could be applied to all the identical units. You might spend $56.40 on one but would buy two if they were priced at $50 or even have no need for a second so wouldn't buy it at any price.
Aren't you really just rewording marginal utility? An unit of butter has a value of $56.40 at this particular time and space but isn't equal to $56.40 because you have competing choices to spend your $56.40 on. If anything, I would say that the butter has a higher value than $56.40 because you obviously value it more than the money you are trading for it.