1. Let k = one plus the last digit of your student number. For example, if your student number is 1234567 then k=8. Suppose an individual as preferences over goods x and y that can be represented by the utility function: U(x,y) = 120 / 1+ |x-ky| where |x-ky| is the absolute value of x - ky (that's k times y) a. Draw the indifference curve of the bundles (x,y) that are indifferent to bundle (x,y) = (11,2). It doesn't have to be drawn to scale (hand drawn is fine), but make sure to label any intercepts . b. Are these preferences monotonic? Explain? c. Are these preferences convex? Explain intuitively with a diagram.
1. Let k = one plus the last digit of your student number. For example, if your student number is 1234567 then k=8. Suppose an individual as preferences over goods x and y that can be represented by the utility function: U(x,y) = 120 / 1+ |x-ky| where |x-ky| is the absolute value of x - ky (that's k times y) a. Draw the indifference curve of the bundles (x,y) that are indifferent to bundle (x,y) = (11,2). It doesn't have to be drawn to scale (hand drawn is fine), but make sure to label any intercepts . b. Are these preferences monotonic? Explain? c. Are these preferences convex? Explain intuitively with a diagram.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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1. Let k = one plus the last digit of your student number. For example, if your student number is 1234567 then k=8. Suppose an individual as preferences over goods x and y that can be represented by the utility function:
U(x,y) = 120 / 1+ |x-ky|
where |x-ky| is the absolute value of x - ky (that's k times y)
a. Draw the indifference curve of the bundles (x,y) that are indifferent to bundle (x,y) = (11,2). It doesn't have to be drawn to scale (hand drawn is fine), but make sure to label any intercepts .
b. Are these preferences monotonic? Explain?
c. Are these preferences convex? Explain intuitively with a diagram.
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