Economics - 0325 - CHAPTER 11 C O N S U M E R PREFERENCES A...

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C H A P T E R 11 C O N S U M E R P REFERENCES A ND C O N S U M E R CHOICE 277 > > > > > > > > > > > > ► CHECK YOUR UNDERSTANDING 1. The accompanying table shows Samantha's preferences for consumption bundles composed of chocolate kisses and licorice drops. a. With chocolate kisses on the horizontal axis and licorice drops on the verti- cal axis, draw hypothetical indifference curves for Samantha and locate the bundles on the curves. Assume that both items are ordinary goods. b. Suppose you don't know the number of utils provided by each bundle. Assuming that more is better, predict Samantha's ranking of each of the four bundles to the extent possible. 2. On the left diagram in panel (a) of Figure 11-4, draw a point B anywhere on the 200-util indifference curve and a point C anywhere on the 100-util indifference curve (but not at the same location as point A). By comparing the utils generated by bundles A and B and those generated by bundles A and C, explain why indifference curves cannot cross.
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