suppose voters A, B, and C have preferences in two dimensions, x and y. Each voter's indifference curves are perfect circles about their ideal points. 1. Suppose that the ideal points are (x, y) = (1,1), (2,2) and (3,3) for voters A, B, and C, respectively. Draw a graph showing these preferences. Suppose the status quo policy is S = (1, 3). What, if any, policy P would you expect to to result? 2. Suppose preferences are like in part (1). Add two new voters, D and E to this diagram, but add them in such a way that they do not change P and where policies D and E are not on the line connecting policies A, B, and C. Explain.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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suppose voters A, B, and C have preferences
in two dimensions, x and y. Each voter's
indifference curves are perfect circles about
their ideal points.
1. Suppose that the ideal points are (x, y) =
(1,1), (2,2) and (3,3) for voters A, B, and C,
respectively. Draw a graph showing these
preferences. Suppose the status quo policy is
S = (1, 3). What, if any, policy P would you
expect to to result?
2. Suppose preferences are like in part (1). Add
two new voters, D and E to this diagram, but
add them in such a way that they do not
change P and where policies D and E are not
on the line connecting policies A, B, and C.
Explain.
Transcribed Image Text:suppose voters A, B, and C have preferences in two dimensions, x and y. Each voter's indifference curves are perfect circles about their ideal points. 1. Suppose that the ideal points are (x, y) = (1,1), (2,2) and (3,3) for voters A, B, and C, respectively. Draw a graph showing these preferences. Suppose the status quo policy is S = (1, 3). What, if any, policy P would you expect to to result? 2. Suppose preferences are like in part (1). Add two new voters, D and E to this diagram, but add them in such a way that they do not change P and where policies D and E are not on the line connecting policies A, B, and C. Explain.
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