art 3 Ben always begins his day with a latte. He makes it by adding coffee and milk in the followingproportions: for any (fluid) ounce (fl oz) of coffee (x) he exactly wants two fl oz of steamed milk(y). In other words, coffee and steamed milk are perfect complements. 1. In a diagram, plot Ben’s preferences (indifference maps). Depict three indifference curvesthat pass through the following bundles(1,2),(2,5)and(4,6). What is the MRS at each ofthese points? 2. Find a utility function that represents these preferences. On the graph from 1) indicate thelevel of utility corresponding to each indifference curve. 3. Multiply your utility function by four and add to it a constant equal to one. How did theindifference map change (explain why)? How was the level of utility associated with the eachindifference curve affected?
art 3 Ben always begins his day with a latte. He makes it by adding coffee and milk in the followingproportions: for any (fluid) ounce (fl oz) of coffee (x) he exactly wants two fl oz of steamed milk(y). In other words, coffee and steamed milk are perfect complements. 1. In a diagram, plot Ben’s preferences (indifference maps). Depict three indifference curvesthat pass through the following bundles(1,2),(2,5)and(4,6). What is the MRS at each ofthese points? 2. Find a utility function that represents these preferences. On the graph from 1) indicate thelevel of utility corresponding to each indifference curve. 3. Multiply your utility function by four and add to it a constant equal to one. How did theindifference map change (explain why)? How was the level of utility associated with the eachindifference curve affected?
Chapter3: Preferences And Utility
Section: Chapter Questions
Problem 3.2P
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Part 3
Ben always begins his day with a latte. He makes it by adding coffee and milk in the followingproportions: for any (fluid) ounce (fl oz) of coffee (x) he exactly wants two fl oz of steamed milk(y). In other words, coffee and steamed milk are perfect complements.
1. In a diagram, plot Ben’s preferences (indifference maps). Depict three indifference curvesthat pass through the following bundles(1,2),(2,5)and(4,6). What is the MRS at each ofthese points?
2. Find a utility function that represents these preferences. On the graph from 1) indicate thelevel of utility corresponding to each indifference curve.
3. Multiply your utility function by four and add to it a constant equal to one. How did theindifference map change (explain why)? How was the level of utility associated with the eachindifference curve affected?
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Ben always begins his day with a latte. He makes it by adding coffee and milk : In other words, coffee and steamed milk are perfect complements.
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