PS3+homework - Intermediate Microeconomics 2010 Problem Set...

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Unformatted text preview: Intermediate Microeconomics, 2010 Problem Set 3: Homework due: Wed/Thur 20/21 1. Consider a coach who has to pick among a group of players and suppose he always prefers one player to another if the rst is either bigger or faster than the second. Are this coach’s preferences over players transitive and/or complete? 2. Supposedly, Germans like co ee and cake. A German ex-pat living in the United States has the following preferences among bundles ( q coffee ;q cake ) where q coffee 0 is the quantity of co ee that she consumes, and q cake 0 is the quantity of cake that she consumes. Firstly, she does not care for co ee. She never touches it. She does like cake, though. However, once she has had a quantity q cake = 4 of cake, she has had enough. If given more cake, she does not touch the extra cake. (a) Are these preferences i. complete? ii. transitive? iii. monotone? (b) For which bundles (if any) ( q coffee ;q cake ) of co ee and cake it is true that the German ex-pat is indi erent between having consumption bundle ( q coffee ;q cake ) and having 2 units of co ee and 2 units of cake. Draw the indi erence \curve" through the point (2 ; 2). (c) For which bundles (if any) ( q coffee ;q cake ) of co ee and cake it is true that the German ex-pat is indi erent between having consumption bundle ( q coffee ;q cake ) and having 5 units of co ee and 5 units of cake. Draw the indi erence \curve" through the point (5 ; 5)....
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This note was uploaded on 12/08/2010 for the course PYSCH 111 taught by Professor Malley during the Spring '08 term at University of Michigan.

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PS3+homework - Intermediate Microeconomics 2010 Problem Set...

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