Draw indifference maps for the following preferences. Do not forget to indicate with arrows in which direction satisfaction increases. In each exercise, put the good that is mentioned first on the horizontal axis. If you perceive a substantial ambiguity in any of the statements, then make an assumption and explain.
Draw indifference maps for the following preferences. Do not forget to indicate with arrows in which direction satisfaction increases. In each exercise, put the good that is mentioned first on the horizontal axis. If you perceive a substantial ambiguity in any of the statements, then make an assumption and explain.
Principles of Microeconomics (MindTap Course List)
8th Edition
ISBN:9781305971493
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter21: The Theory Of Consumer Choice
Section: Chapter Questions
Problem 2CQQ
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Preferences and Utility Analysis
Before understanding what is preference and utility analysis, it is very important to understand the terms preference and utility separately.
Question
![Joe likes both hamburgers and soft drinks. For every hamburger that he consumes,
however, he needs exactly three softdrinks. He trows away any burger that is not
matched with three softdrinks, and any softdrink that is not matched with a third
of a hamburger.
Jane likes drugs and money. The more drugs she consumes, the more money is
she willing to give up for an additional unit of drugs.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0e314950-d015-4e7b-bc1d-bbb11e70a793%2F28420c53-4e1e-4a02-ab4d-94903fb15048%2Fb8oqle8_processed.png&w=3840&q=75)
Transcribed Image Text:Joe likes both hamburgers and soft drinks. For every hamburger that he consumes,
however, he needs exactly three softdrinks. He trows away any burger that is not
matched with three softdrinks, and any softdrink that is not matched with a third
of a hamburger.
Jane likes drugs and money. The more drugs she consumes, the more money is
she willing to give up for an additional unit of drugs.
![Draw indifference maps for the following preferences. Do not forget to
indicate with arrows in which direction satisfaction increases. In each exercise, put
the good that is mentioned first on the horizontal axis. If you perceive a substantial
ambiguity in any of the statements, then make an assumption and explain.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0e314950-d015-4e7b-bc1d-bbb11e70a793%2F28420c53-4e1e-4a02-ab4d-94903fb15048%2F0zfkton_processed.png&w=3840&q=75)
Transcribed Image Text:Draw indifference maps for the following preferences. Do not forget to
indicate with arrows in which direction satisfaction increases. In each exercise, put
the good that is mentioned first on the horizontal axis. If you perceive a substantial
ambiguity in any of the statements, then make an assumption and explain.
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