Sandra consumes only hamburgers (good x) and milkshakes (good y). She is indifferent between bundles A = (2,10), B = (6,4) and C = (10,2), which are on the same indifference curve. If MRSx,y (A) > MRSx,y (B) > MRSxy (C) (e.g., 8>2>), how does her indifference curve look like? Sketch this indifference curve using the information about the MRSx,y to make sure that the curvature is accurately depicted. Label your graph. [Hint: Plot the three bundles and then use the definition of MRSxy=-slope IC to depict the shape of the indifference curve passing through these bundles by approximately figuring out how the line tangent to each point would look like (i.e., more or less steep)]

Sandra consumes only hamburgers (good x) and milkshakes (good y). She is indifferent between bundles A = (2,10), B = (6,4) and C = (10,2), which are on the same indifference curve. If MRSx,y (A) > MRSx,y (B) > MRSxy (C) (e.g., 8>2>), how does her indifference curve look like? Sketch this indifference curve using the information about the MRSx,y to make sure that the curvature is accurately depicted. Label your graph. [Hint: Plot the three bundles and then use the definition of MRSxy=-slope IC to depict the shape of the indifference curve passing through these bundles by approximately figuring out how the line tangent to each point would look like (i.e., more or less steep)]

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter3: Preferences And Utility

Section: Chapter Questions

Problem 3.14P

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