The following diagram is a mistake. Indifference curves cannot cross. Transitivity rules will make you incorrectly conclude that: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a b A>B с A=B P C> B A>C e C=B Good Y Good X ·10₂ Fig. 3: Intersecting Indifference Curves

The following diagram is a mistake. Indifference curves cannot cross. Transitivity rules will make you incorrectly conclude that: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a b A>B с A=B P C> B A>C e C=B Good Y Good X ·10₂ Fig. 3: Intersecting Indifference Curves

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

ChapterE: Budget Constraint And Indifference Curve Analysis

Section: Chapter Questions

Problem 4QP

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Dr. Kremepuff gives 3 midterm exams. He drops the lowest score and gives each student his/her average score on the other two exams. Gertie is taking his course and has a 60 on her first exam. Let x2 be her score on the second exam and x3 be her score on the third exam. On a graph with x2 on the horizontal axis and x3 on the vertical, draw Gertie's indifference curve that passes through the point (x2, x3) = (50, 70).
answer quickly
Define indifference map in not more than 2 lines
b) Define indifference curve and discuss the characteristics of an indifferencecurve.
Linda loves buying shoes and going out to dance. 20 Her utility function for pairs of shoes, S, and the number of times she goes dancing per month, T, is: 18- 16- U(S, T) = 2ST 14- It costs Linda $75 to buy a new pair of shoes or to spend an evening out dancing. Assume that she has $750 to spend on shoes and dancing. E 12- 1.) Use the line drawing tool to draw Linda's budget line. Properly label this line. 10- 2.) Use the point drawing tool to locate Linda's optimal consumption bundle. Label this point 'R'. 8- 6- Carefully follow the instructions above, and only draw the required objects. 4- What is Linda's marginal rate of substitution? -. (Enter your response as an 2- integer. Note that the minus sign is already included.) 0- 12 10 Shoes (S) 14 16 18 20 React tv MacBook Air 80 DII F1 F2 F3 F4 F5 F6 F7 F8 F9 F10 F11 @ 23 2$ & 1 3 4 7 8 Q W E T Y { A S F H. J K C V M. く tion command command option ピーの Dancing (T) コ B. レ

Consider the following indifference curves. U1 U2 X U3 Which indifference curves violate the assumption of monotonicity? b₁ U4
Which are the three main assumptions of indifference curves? Please do the comparison with each other.
1. For each of the following scaling functions for a von Neumann-Morgenstern utility func- tion, determine the Marginal Rate of Substitution between X1 and X2 and the equation for an indifference curve through the consumption bundle (100,100) (solve for X2 on the left hand side of the equation). State 1 is the bad outcome that occurs with probability 0.2 and State 2 the good outcome that occurs with probability 0.8. Graph these indif- ference curves and comment on what you see. Is a consumer with these preferences risk averse, risk neutral, or risk loving? (a) V(X) = InX (b) V(X)= VX (c) V(X)= X (d) V(X)= X²
What are indifference curves?
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Explain how indifference curves can never cross.
Suppose that one of your friends does not care if she consumes spaghetti (S) or noodle (N). She wants toconsume either two-dish spaghetti or two-dish noodle or any combination of both which adds up to twodishes.(i) Write the utility function of your friend to represent his preferences.(ii) Draw couple of indifference curves of your friend on graph with appropriate labels.(iii) Denote prices as Pn, Ps; income as M. If Pn < Ps, then determine the demand function of your friend foreach product as a function of prices and income.