Michael and Kelly consume food and clothing. In particular, Michael currently consumes 23 units of food and 19 units of clothing and Kelly currently consumes 17 units of food and 21 units of clothing. At these levels of consumption, Michael's MRS of food for clothing is 0.40 and Kelly's MRS of food for clothing is 2.50. Illustrate with an Edgeworth box. 1.) Using the three-point curved line drawing tool, draw an indifference curve for Michael when consuming 23 units of food and 19 units of clothing. Label this curve UM- 2.) Using the three-point curved line drawing tool, draw an indifference curve for Kelly when consuming 17 units of food and 21 units of clothing. Label this curve UK. Carefully follow the instructions above, and only draw the required objects. Next, fill in the missing information in the following table. For simplicity, assume the consumers have the option of trading one unit of food (F) for one unit of clothing (C). Fill in the following table. (Enter your responses using integers.) Individual Michael Kelly After this trade, Michael's MRS will Initial Allocation 23F, 19C 17F, 21C Trade for and Kelly's MRS will Final Allocation F, C F.C Clothing OK Kelly 17 Food Michael Ом 19 GO a
Michael and Kelly consume food and clothing. In particular, Michael currently consumes 23 units of food and 19 units of clothing and Kelly currently consumes 17 units of food and 21 units of clothing. At these levels of consumption, Michael's MRS of food for clothing is 0.40 and Kelly's MRS of food for clothing is 2.50. Illustrate with an Edgeworth box. 1.) Using the three-point curved line drawing tool, draw an indifference curve for Michael when consuming 23 units of food and 19 units of clothing. Label this curve UM- 2.) Using the three-point curved line drawing tool, draw an indifference curve for Kelly when consuming 17 units of food and 21 units of clothing. Label this curve UK. Carefully follow the instructions above, and only draw the required objects. Next, fill in the missing information in the following table. For simplicity, assume the consumers have the option of trading one unit of food (F) for one unit of clothing (C). Fill in the following table. (Enter your responses using integers.) Individual Michael Kelly After this trade, Michael's MRS will Initial Allocation 23F, 19C 17F, 21C Trade for and Kelly's MRS will Final Allocation F, C F.C Clothing OK Kelly 17 Food Michael Ом 19 GO a
Chapter3: Preferences And Utility
Section: Chapter Questions
Problem 3.7P
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