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Unformatted text preview: Intermediate Microeconomics Homework Set 2: Preferences and Utility Due 09/17 (Beginning of class) Exercise 1 Consider the following utility functions: (1) u ( x 1 ,x 2 ) = x 1 + 2 x 2 . (2) u ( x 1 ,x 2 ) = 2 x . 25 1 x . 75 2 . (3) u ( x 1 ,x 2 ) = 1 2 x 2 1 x 2 . (4) u ( x 1 ,x 2 ) = min { x 1 , 2 x 2 } . (5) u ( x 1 ,x 2 ) = max { x 1 , 2 x 2 } . Give the equation of the indifference curve corresponding to utility level u for (1) to (3). Use separate graphs to sketch two indifference curves for (1) to (5). Exercise 2 Jims utility function is u ( x 1 ,x 2 ) = x 1 x 2 . Jerrys utility function is u ( x 1 ,x 2 ) = 1000 x 1 x 2 +2000. Tammys utility function is u ( x 1 ,x 2 ) = x 1 x 2 (1 x 1 x 2 ). Orals utility function is u ( x 1 ,x 2 ) = 1 / (10+2 x 1 x 2 ). Marjoes utility function is u ( x 1 ,x 2 ) = x 1 ( x 2 +1000). Pats utility function is u ( x 1 ,x 2 ) = 0 . 5 x 1 x 2 10000. Billys utility function is u ( x 1 ,x 2 ) = x 1 /x 2 . Franciss utility function is....
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This note was uploaded on 09/21/2008 for the course ECON 420k taught by Professor Clements during the Spring '07 term at University of Texas at Austin.
 Spring '07
 Clements
 Utility

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