Homework Assignment 2B Answer key.pdf - Homework Assignment 2 ECON 311 Spring 2018 1 Draw two indifference curves for each of the following pairs of

# Homework Assignment 2B Answer key.pdf - Homework Assignment...

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Homework Assignment 2 ECON 311 Spring 2018 1. Draw two indifference curves for each of the following pairs of goods. Put the quantity of the first good on the horizontal axis and the quantity of the second good on the vertical axis. The bundles along U2 are strictly preferred to the bundles along indifference curve U1 (U2>U1) a. Paul likes pencils and pens, but does not care which he writes with. Perfect substitutes b. Rhonda likes carrots and dislikes broccoli. If Rhonda consumes more carrots her utility increases but if she consumes more broccoli her utility decreases. Broccoli is a bad. c. Emily likes hip- hop iTunes downloads and doesn’t care about heavy metal downloads . Heavy-metal is a neutral good.
d. Michael only likes dress shirts and cufflinks in 1 to 2 proportions. Cufflinks and dress shirts are perfect complements in consumption. For example, 1 dress shirt and 2 cufflinks or 2 dress shirts and 4 cufflinks. e. Carlene likes pizza and shoes.
2. Suppose that John is indifferent between consuming bundle A , which consists of 4 apples and 1 peach, and bundle B , which consists of 4 peaches and 1 apple. If John were given the choice between bundle A