case 1,2,3 Practice sheet: Representing Preferences GraphicallyQuestion 1: What does it mean for two goods to be perfect substitutes?Question 2: Represent the preferences of the following people graphically:Case 1: Mary likes milk which is sold in either one-gallon container (call this good x) or a half gallon-container(call this good y). She only cares about the total amount of milk he can get.LCase 2: Cole is very specific in how he drinks his coffee in the morning. He only drinks coffee if he gets 2 unitsof creamer (call this good x) with every cup of coffee (call this good y). He loves coffee and the more he getsthe happier he is.Case 3: Libby loves cookies (good x) but hates milk (good y). She has to consume all milk offered to her andshe cannot throw it away.7

Answered: Question 2: Represent the preferences…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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case 1,2,3

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Preferences reference the consumer's willingness to consume 2 or more goods. It can be represented by the indifference curve.

The indifference curve shows the various combination of the 2 goods on which the consumer remains indifferent which means all the point provides the same level of utility.

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