ps1x313_f05

ps1x313_f05 - Econ 313.1 Wissink Fall 2005 PS#1 XtraQ DUE...

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1) Professor Goodheart always gives two midterms in his communications class. He only uses the higher of the two scores that a student gets on the midterms when he calculates the course grade. a) Nancy Lerner wants to maximize her grade in this course. Let x be her score on the first midterm and let y be her score on the second midterm. Which combination of scores would Nancy prefer, (x = 20 and y = 70) or (x = 60 and y = 60)? b) On a graph draw an indifference curve showing all of the combinations of scores that Nancy likes exactly as much as (x = 20 and y = 70). Also draw an indifference curve showing the combinations that Nancy likes exactly as much as (x = 60 and y = 60). c) Does Nancy have convex preferences over these combinations? d) Nancy is also taking a course in economics form Professor Stern. Professor Stern gives two midterms. Instead of discarding the lower grade, Professor Stern discards the higher one. Let x = score on midterm 1 and let y = score on midterm 2. Which combination of
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