LG2 - perfect substitute goods. 5. Graph and explain the...

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University of Wisconsin Department of Economics Economics 301: Intermediate Microeconomic Theory Korinna K. Hansen Learning Guide 2 Due Date: Friday, February 8, 2008 Reading Assignment: Varian Chapter 5 up to page 83. Problem Assignment: Problems 2, 3, & 5 on page 90. Objectives: After completing the assignment you should be able to do the following: 1.Describe the optimal choice for a consumer given a budget line and a set of indifference curves. 2. Define the tangency condition. 3. Present at least two different situations where the tangency condition is not satisfied while we are having a consumer optimal choice. 4. Graph and explain the optimal choice for a consumer who is considering the purchase of two
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Unformatted text preview: perfect substitute goods. 5. Graph and explain the optimal choice for a consumer who is considering the purchase of two perfect complements. 6. Graph and explain the optimal choice for a consumer who is considering the purchase of a regular good and a neutral good. 7. Graph and explain the optimal choice for a consumer who is considering the purchase of a regular good and a bad. 8. Graph and explain the optimal choice for a consumer who has concave preferences. 9. Write out the formulas for the optimal choice with Cobb Douglas preferences and describe the convenience in their interpretation....
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