# Week 2 Tutorial Questions 3 - Tutorial Questions Week 2...

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Tutorial Questions Week 2 beginning 7thMarchQuestion 4 has been moved to Week 3 tute1.Carefully (be accurate) plot the following bundles in the (x,y) plane.A=(5,12), B=(15,8),C=(10,10), D=(13,12), E=(5,9).We know that this individuals preferences are rational,and we know that this individual is indifferent between bundles A and B.a.Does the consumer prefer bundle A or E?C or D?E or B?C or B?B or D?In each case,brieflyexplain why. List any preference assumptions that youused for each case.b.Write down this individual’s complete preference ranking over all the bundlesA-E. List any preference assumptions that you used.2.Draw indifference maps to represent preferences over the two commodities,xandy, in thefollowing cases and comment on the MRSxy for each case:i)x= noise,y= money.ii)x= noise,y= air pollution.iii)x= 500g pack of sugar,y= 250g pack of sugar.iv) Sofia will consume pancakes (x) only with whipped cream (y).3.Sometimes it makes sense to think about commodities that are goods up to a certain point,
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Term
Spring
Professor
N/A
Tags
Candy bars, espressos