Pam 200 Handout2

Pam 200 Handout2 - PAM 2000 Fall 2008 TA Eunkyeong Lee...

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PAM 2000 Fall 2008 1. Draw indifference curves (over baseball and football) to represent the following descriptions of consumer preferences: (a) I don’t care whether I watch football or baseball: I just like to watch sports. (b) I only watch football: baseball is boring. (c) I don’t like to watch football: it is too violent. I don’t like to watch baseball either: it is too dull. (d) I like to watch a little football and a little baseball more than a lot of either: while I like sports, I enjoy variety as well. (e) My friend and I only like to watch sports together, but since I like football and he likes baseball, we always watch equal amounts of each. (f) I like watching baseball and football, although I enjoy baseball somewhat more than football. Unfortunately, after an hour of watching TV, my eyes get tired and I don’t enjoy it anymore. 2. Suppose your utility function U = 2X + 5Y + XY. MU X = 2 + Y, and MU Y = 5 + X. (a)
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This note was uploaded on 09/14/2008 for the course PAM 2000 taught by Professor Evans,t. during the Fall '07 term at Cornell.

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Pam 200 Handout2 - PAM 2000 Fall 2008 TA Eunkyeong Lee...

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