Problem 3 (Perfect Complements) Trevor always begins his day with a strawberry milkshake. He makes it by mixing milk (x1) with five strawberries (r2). The secret of a really good milkslhake lies in the optimal proportion of milk and fruit: one glass always comes with five strawberries! a) Plot in a diagram Trevors' preferences (indifference map). Depict three indifference curves that pass through the following bundles (5, 1), (10, 10) and (15,4). What is the MRS at each of these points? b) What utility function represents these preferences (make sure you use right coefficients defining proportion). On the graph from a), indicate the level of utility corresponding to cach indifference curve. c) Multiply your utility function by ten and add to it constant equal to two. How did the indifference map change (explain why)? How was the level of utility associated with the each indifference curve affected?

Problem 3 (Perfect Complements) Trevor always begins his day with a strawberry milkshake. He makes it by mixing milk (x1) with five strawberries (r2). The secret of a really good milkslhake lies in the optimal proportion of milk and fruit: one glass always comes with five strawberries! a) Plot in a diagram Trevors' preferences (indifference map). Depict three indifference curves that pass through the following bundles (5, 1), (10, 10) and (15,4). What is the MRS at each of these points? b) What utility function represents these preferences (make sure you use right coefficients defining proportion). On the graph from a), indicate the level of utility corresponding to cach indifference curve. c) Multiply your utility function by ten and add to it constant equal to two. How did the indifference map change (explain why)? How was the level of utility associated with the each indifference curve affected?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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can u solve all questions below with step by step explanation?
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