Suppose there are only two goods in the economy: Yo-yos and Marbles. Bob only cares about his consumption of Yo-yos; the more Yo-yos he has the happier he is, regardless of his consumption of Marbles. In contrast, Lucy only cares about his consumption of Marbles; the more Marbles she has the happier she is, regardless of her consumption of Yo-yos. (a) Draw Bob's indifference curves, putting Yo-yos in the x-axis and Marbles in the y-axis. (b) Draw Lucy's indifference curves, putting Yo-yos in the x-axis and Marbles in the y-axis. (c) Do Bob's and Lucy's preferences comply with the property of diminishing marginal rate of substitution?
Suppose there are only two goods in the economy: Yo-yos and Marbles. Bob only cares about his consumption of Yo-yos; the more Yo-yos he has the happier he is, regardless of his consumption of Marbles. In contrast, Lucy only cares about his consumption of Marbles; the more Marbles she has the happier she is, regardless of her consumption of Yo-yos. (a) Draw Bob's indifference curves, putting Yo-yos in the x-axis and Marbles in the y-axis. (b) Draw Lucy's indifference curves, putting Yo-yos in the x-axis and Marbles in the y-axis. (c) Do Bob's and Lucy's preferences comply with the property of diminishing marginal rate of substitution?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Question 1
Suppose there are only two goods in the economy: Yo-yos and Marbles. Bob only cares about his
consumption of Yo-yos; the more Yo-yos he has the happier he is, regardless of his consumption
of Marbles. In contrast, Lucy only cares about his consumption of Marbles; the more Marbles
she has the happier she is, regardless of her consumption of Yo-yos.
(a) Draw Bob's indifference curves, putting Yo-yos in the x-axis and Marbles in the y-axis.
(b) Draw Lucy's indifference curves, putting Yo-yos in the x-axis and Marbles in the y-axis.
(c) Do Bob's and Lucy's preferences comply with the property of diminishing marginal rate
of substitution?
(d) Are Bob's and Lucy's preferences transitive?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7aea5f17-4d8f-475f-a835-e28ffd3d801f%2F1c0fcc83-80c2-4061-a7fd-d8ff09d37cdf%2Feisgfro_processed.png&w=3840&q=75)
Transcribed Image Text:Question 1
Suppose there are only two goods in the economy: Yo-yos and Marbles. Bob only cares about his
consumption of Yo-yos; the more Yo-yos he has the happier he is, regardless of his consumption
of Marbles. In contrast, Lucy only cares about his consumption of Marbles; the more Marbles
she has the happier she is, regardless of her consumption of Yo-yos.
(a) Draw Bob's indifference curves, putting Yo-yos in the x-axis and Marbles in the y-axis.
(b) Draw Lucy's indifference curves, putting Yo-yos in the x-axis and Marbles in the y-axis.
(c) Do Bob's and Lucy's preferences comply with the property of diminishing marginal rate
of substitution?
(d) Are Bob's and Lucy's preferences transitive?
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