A_1 answer key-2 - fl/fi/ #W ’07 /. a) V, :/0 1:9 mz4o...

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Unformatted text preview: fl/fi/ #W ’07 /. a) V, :/0 1:9 mz4o 9, 4mg bus/9216 Lam RXHLPDQIM is (ox.+5XL=4o «w—ZH‘ d) We wwwmmy Filo buy ‘fha goods a/cnj m budyd (“we m not ingot? of 1%; budget Sat bpmwse we, WW maximée whiij find fie (‘Qn [)2 max/mied aid/v 4/ {Xe badget (2M \prny‘dod” by Me [I‘m/ted fn Lame, $40) 8) PIZg Pf‘g “4:40 ' 9o. 15/qu budget UM. .PK‘ +P2XL: m {5‘ SXHFSXI 3’» 4O VLUAQ" X130 :X2:8 WAQHX1202X1:8 Chm :r’E—K— L0,} X7, P;— f, 3C)PI:P1:§ m:30 go The budget (Iv-Ag PIXI+P1XLZ m {g 4 SXL :. go when )(‘:0 , K136 when X1302 X \:6 /‘.‘ ‘ ‘~_E.L—-’-——-S—’;__. “)I'vPC’ ’ P1 ’ g ] 9) . .(a) . ucx,.’.71xp)v:;x,.HXLWM . (P,+t)X‘+P1XLTW PPS f1“: , 9o HM? budge/t (m2 is QKH’SXLtgo - a , UJ/‘Qn x, :0 :> y}- T0 9, 6 50 U/hQU’V 1 3‘50 C) )(i : : g _~ P,+t” 34°F” ’ h ' ' if X; I 7 I 0 g ., X1.“ \l V i ) M¢./]_€I~WMH:§ _,an6{. [35 X»? l _ ?> X1 r S"! 75 If K‘:,1 :7 KLV..:_.__£:_LL'V:H 2 .5 V I rmcio A Therefiwe ,_.{:/1raz,..pon}yti Wei bl) ,. (f5 , 5 l ,.3( z ,A 3 ) > when we. and . .~+ wk) x1: If ><_;.,,:.2.,.,.:> x1: Iii; 2. . 3 ., V‘;.f...><;,;afl;>_xmgig—fig: .. v. ‘ ’ .,.T‘"Qm~fov9 ., .t/wu Poxhts are. ‘12; ) ; (2 ’,L) V; ,:+_)<}:2¢_ 75—) , lf’é X.lrr:% 3) )(L— 2 V 5 ’— 3 i) when Mfig‘a/nd fi/‘X. 6$>Xw:' "+sz7 :>X132/ 1:) PfX1595>X113 :7 (3,3) ,7) when Uzi—4' ww‘ E Q ff X13§$>X1:‘:>(5)l) Cf {1:613Xw31:> (6,1) \l‘f {’37 9>Xm:3:\) )w/W“ (4:3 W {I}. ’~_](_ X‘s¢;7Xm—7’;>CL+J|) r11. X|Z§3>X~b;21> (5)1) [‘14 XI:6=’—>X):;$>(6> 0‘9 0‘5 C) “(Kl)XL):xy XL "5 when (4:4 and "HM )WXw/(g .-+x,:l,zwaxw=8 "f X2734, WXL:L{_ I?) WAQfi 0‘ :9 MO! I} )051'1‘0‘0/1‘ X113 ’Lf XI :3,WX1:27 if K.:'? , wig”qu IQ f if X|;161WHXm:,6, . "3C XI: 32 anyza . 2a , _ if x,.= 8 ,mxb:3>.. 2L 25' C . Barnum Then ;~+ {Law/w wa z» a I26) 14’ X;,:q'r +59}! K: :K. 15> C4! .,‘+ X139» H!“ )(1 :if 9} (721+) and. ,‘f ¥.=I~”,?r/wn “:7 =7 (’17) .‘1L 1::4, —Mon 75:5 ‘9 (4") 1“]? .X1. 5, ,, +5011 . ( V .4 A) A1,. (l;;2)~.(£/—,3) 3' g)" (lbw/VOA” C. C; Q !,!8)m(%,6) (4,6) } c4, 3) m Um) (ma)? (man, (4)5) (3,32) 7 (Lb/V (m3) g>A C>A)B>c 3. Rachel makes the following preference statements about bundles containing Gucci shoeslx) and Prada bags(y): (1,12)"(4,3) (4,6)“(3,8) (l,18)"'(3,6) (3) Using the appropriate assumptions about consumer preferences, construct Rachel’s preference ordering (order all bundles). Explain which assumption(s) you are using and when. Answer: Define: A: (1,12)~(4,3) B: (4,6)~(3,8) c: (1,18)~(3,6) 1. Compare A and B: As (4,6)>(4,3), so B>A 2. Compare B and C: As (3,8)> (3, 6), so B>C 3. Compare: A and C: As (1, 18)>(1, 12), so C>A Final Order: B>C>A Assumptions used: 1. Transitivity 2. Non—satiation (b) Check whether the function u(X, y) = Z‘lxy can reflect Rachel’s tastes. For bundle A: 00,12) = U(4,3) = 2J5 For bundle B: U(4, 6) = (1(3, 8) = 2m For bundle C: U(1, 18) = U(3, 6) = NE Conclusion: UB>UC>UA Utility can reflect consumer preference. (c) if Rachel currently has the bundle (3, 8), is she willing to trade it for bundle (5, 4)? Why or why not? U(5, 4) = 2J2? < U(3, 8) = zfl So Rachel is not willing to trade. ...
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This note was uploaded on 06/03/2011 for the course ECON 301 taught by Professor Na during the Spring '11 term at University of Calgary.

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A_1 answer key-2 - fl/fi/ #W ’07 /. a) V, :/0 1:9 mz4o...

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