Exam 2: Preferences-Part A

Belinda loves chocolate and always thinks that more is better than less.Belinda thinks that a few piano lessons would be worse than none at all, but if she had enough piano lessons to get good at playing the piano, she would prefer more lessons to less.Draw a graph with piano lessons on the horizontal axis and chocolate on the vertical axis.On your graph sketch two indifference curves for Belinda that would be consistent with this story.Label the better of the two indifference curves AA and the worse one BB.

The marginal rate of substitution measures the distance between one indifference curve and the next one.

Leo consumes only apples and bananas.He prefers more apples to fewer, but he gets tired of bananas.If he consumes fewer than 24 bananas per week, he thinks that 1 banana is a perfect substitute for 1 apple.But you would have to pay him 1 apple for each banana beyond 24 that he consumes.The indifference curve that passes through the consumption bundle with 31 apples and 36 bananas also passes through the bundle with A apples and 18 bananas, where A equals

If we graph Mary Granola's indifference curves with avocados on the horizontal axis and grapefruits on the vertical axis, then whenever she has more grapefruits than avocados, the slope of her indifference curve is 22.Whenever she has more avocados than grapefruits, the slope is 21/2.Mary would be indifferent between a bundle with 14 avocados and 20 grapefruits and another bundle that has 26 avocados and

If good X is measured on the horizontal axis and good Y on the vertical, what can you say about the preferences of someone whose indifference curves are a.parallel to the Y axis? b.positively sloped with more desirable indifference curves as one moves to the right? c.negatively sloped with more desirable indifference curves as one moves to the left?

Recall that Tommy Twit's mother measures the departure of any bundle from her favorite bundle for Tommy by the sum of the absolute values of the differences.Her favorite bundle for Tommy is (2, 7), that is, 2 cookies and 7 glasses of milk.Tommy's mother's indifference curve that passes through the point (c, m) = (4, 5)also passes through

Nancy's psychology teacher will give her a course grade that is the maximum of her scores on three midterm examinations.Nancy has convex preferences over the possible combinations of midterm scores.

A consumer who is unable to detect small differences in the amount of water in her beer could have a transitive strict preference relation but is unlikely to have a transitive indifference relation.

If two goods are both desirable and preferences are convex, then

The relation "is preferred to" between commodity bundles is just one example of a binary relation.Another example is the relation "is a full brother of" defined over the set of all human beings.Let xRy mean person x is a full brother of person y.

Tim consumes only apples and bananas.He prefers more apples to fewer, but he gets tired of bananas.If he consumes fewer than 29 bananas per week, he thinks that 1 banana is a perfect substitute for 1 apple.But you would have to pay him 1 apple for each banana beyond 29 that he consumes.The indifference curve that passes through the consumption bundle with 30 apples and 39 bananas also passes through the bundle with A apples and 21 bananas, where A equals

Draw graphs with quantities of pepperoni pizza on the horizontal axis and quantities of anchovy pizza on the vertical axis to illustrate the following situations.In each case draw two different indifference curves and make a little arrow pointing in the direction of greater preference. a.Marvin loves pepperoni pizza and hates anchovy pizza. b.Mavis hates anchovy pizza and is completely indifferent about pepperoni pizza.

Scholastica is taking a class from Professor Chaos.Professor Chaos gives two tests in this course and determines a student's grade as follows.He determines the smaller of the following two numbers: half of the score on the first test (which is a relatively easy test)and the total score on the second test.He gives each student a numerical score equal to the smaller number and then ranks the students.Scholastica would like to be ranked as high as possible in Professor Chaos's rankings.If we represent her score on the first exam on the horizontal axis and her score on the second exam on the vertical axis, then her indifference curves

Charlie's indifference curves have the equation x_B = constant/x_A, where larger constants denote better indifference curves.Charlie strictly prefers the bundle (6, 16)to

Charlie's indifference curves have the equation x_B = constant/x_A where larger constants denote better indifference curves.Charlie strictly prefers the bundle (10, 17)to

I prefer 6 apples and 1 orange to 5 apples and 2 oranges.My preferences

Mac Rowe doesn't sweat the petty stuff.In fact, he just cannot detect small differences.He consumes two goods, x and y.He prefers the bundle (x, y)to the bundle (x', y')if and only if (xy - x'y' > 1).Otherwise he is indifferent between the two bundles. a.Show that the relation of indifference is not transitive for Mac.(Hint: Give an example.) b.Show that the preferred relation is transitive for Mac.

A consumer with convex preferences who is indifferent between the bundles (5, 2)and (11, 6)will like the bundle (8, 4)at least as well as either of the first two bundles.

Nancy Lerner is taking a course from Professor Goodheart who will count only her best midterm grade and from Professor Stern who will count only her worst midterm grade.In one of her classes, Nancy has scores of 30 on her first midterm and 50 on her second midterm.When the first midterm score is measured on the horizontal axis and her second midterm score on the vertical, her indifference curve has a slope of zero at the point (30, 50).Therefore this class could

If we graph Mary Granola's indifference curves with avocados on the horizontal axis and grapefruits on the vertical axis, then whenever she has more grapefruits than avocados, the slope of her indifference curve is 22.Whenever she has more avocados than grapefruits, the slope is 21/2.Mary would be indifferent between a bundle with 22 avocados and 37 grapefruits and another bundle that has 37 avocados and