LG1 - weakly preferred. 4. Be able to prove that...

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University of Wisconsin Department of Economics Economics 301: Intermediate Microeconomic Theory Korinna K. Hansen Learning Guide 1 Due Date: Friday, February 1, 2008 Reading Assignment: Varian Chapter 3. Problem Assignment: Problems 3, 7, 10 , and 11 on pages 52-53. Objectives: After completing the assignment you should be able to do the following: 1. Define what it means for a consumer to strictly prefer, or weakly prefer a consumption bundle (x 1 , x 2 ) over (y 1 , y 2 ) , or to be indifferent between the two bundles. 2. Define and explain the three axioms for “consistent” consumer preferences. 3. Be able to show a weakly preferred set in an indifference curve graph and prove that it is
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Unformatted text preview: weakly preferred. 4. Be able to prove that indifference curve cannot cross. 5. Be able to graph and explain the slope of the indifference curves for perfect substitute goods 6. Be able to graph and explain the slope of the indifference curves for perfect complements. 7. Be able to graph and explain the shape and slope of indifference curves for a bad and a neutral good. 8. Be able to graph and explain what monotonic preferences are. 9. Be able to graph and explain what convex, strictly convex, nonconvex and concave preferences are. 10. Define and show on a graph the marginal rate of substitution. What is its relationship with the exchange rate?...
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