(d) What is the slope of his indifference curve at the point (4, 12)?-1 Berries 0 Nuts (e)What is the slope of his indifference curve at the point(9, 12)?-2 /3 at the point(4, 16)? ( Do the indifference curves you have drawn for Ambrose exhibit dimin- hing marginal rate of substitution? Yes (9) Does Ambrose have convex preferences? Yes 3.3(0)Shirley Sixpack is in the habit of drinking beer each evening while watching"The Best of Bowlerama"on TV. She has a strong thumb and a big refrigerator so she doesn t care about the size of the cans that beer comes in, she only cares about how much beer she has (a)On the graph below, draw some of Shirley's indifference curves be- tween 16-ounce cans and 8- of beer. Use blue ink to draw these indifference curves
NAME 21 (d) What is the slope of his indifference curve at the point (4, 12)? −1. 0 10 20 30 40 10 20 30 Nuts Berries 40 Pencil Shading Red Curve Red Shading Blue Curve (e) What is the slope of his indifference curve at the point (9, 12)? −2/3 at the point (4, 16)? −1. (f) Do the indifference curves you have drawn for Ambrose exhibit diminishing marginal rate of substitution? Yes. (g) Does Ambrose have convex preferences? Yes. 3.3 (0) Shirley Sixpack is in the habit of drinking beer each evening while watching “The Best of Bowlerama” on TV. She has a strong thumb and a big refrigerator, so she doesn’t care about the size of the cans that beer comes in, she only cares about how much beer she has. (a) On the graph below, draw some of Shirley’s indifference curves between 16-ounce cans and 8-ounce cans of beer. Use blue ink to draw these indifference curves
22 PREFERENCES ( Ch. 3) 8-ounce Blue lines Red Lines 8 16-ounce (b) lorraine Quiche likes to have a beer while she watches "Masterpiece Theatre. She only allows herself an 8-ounce glass of beer at any one time. Since her cat doesnt like beer and she hates stale beer. if there is more than 8 ounces in the can she pours the excess into the sink. She has no moral scruples about wasting beer. ) On the graph above, use red ink to draw some of lorraine' s indifference curves 3.4(0) Elmo finds himself at a Coke machine on a hot and dusty Sunday The Coke machine requires exact change--two quarters and a dime. No other combination of coins will make anything come out of the machine No stores are open; no one is in sight. Elmo is so thirsty that the only thing he cares about is how many soft drinks he will be able to buy with the change in his pocket; the more he can buy, the better. While Elmo pockets, your task is to draw some indifference curve describe Elmo's preferences about what he finds
22 PREFERENCES (Ch. 3) 0 246 8 2 4 6 16-ounce 8-ounce 8 Blue Lines Red Lines (b) Lorraine Quiche likes to have a beer while she watches “Masterpiece Theatre.” She only allows herself an 8-ounce glass of beer at any one time. Since her cat doesn’t like beer and she hates stale beer, if there is more than 8 ounces in the can she pours the excess into the sink. (She has no moral scruples about wasting beer.) On the graph above, use red ink to draw some of Lorraine’s indifference curves. 3.4 (0) Elmo finds himself at a Coke machine on a hot and dusty Sunday. The Coke machine requires exact change—two quarters and a dime. No other combination of coins will make anything come out of the machine. No stores are open; no one is in sight. Elmo is so thirsty that the only thing he cares about is how many soft drinks he will be able to buy with the change in his pocket; the more he can buy, the better. While Elmo searches his pockets, your task is to draw some indifference curves that describe Elmo’s preferences about what he finds
(a) If Elmo has 2 quarters and a dime in his pockets, he can buy 1 soft drink. How many soft drinks can he buy if he has 4 quarters and 2 dimes? 2 (b) Use red ink to shade in the area on the graph consisting of all com- binations of quarters and dimes that Elmo thinks are just indifferent to having 2 quarters and 1 dime.(Imagine that it is possible for Elmo to ave fractions of quarters or of dimes, but, of course, they would be use- less in the machine. Now use blue ink to shade in the area consisting of all combinations that Elmo thinks are just indifferent to having 4 quarters and 2 dimes. Notice that elmo has indifference "bands not indifference curves (c) Does Elmo have convex preferences between dimes and quarters? Y (d) Does Elmo always prefer more of both kinds of money to less? No (e) Does Elmo have a bliss point? No () If Elmo had arrived at the Coke machine on a Saturday, the drugstore across the street would have been open. This drugstore has a soda foun- tain that will sell you as much Coke as you want at a price of 4 cents an ounce. The salesperson will take any combination of dimes and quarters in payment. Suppose that Elmo plans to spend all of the money in his pocket on Coke at the drugstore on Saturday. On the graph above, use pencil or black ink to draw one or two of Elmo's indifference curves be- tween quarters and dimes in his pocket.(For simplicity, draw your graph
NAME 23 0 246 8 2 4 6 Quarters Dimes 8 Red shading Blue shading Black lines (a) If Elmo has 2 quarters and a dime in his pockets, he can buy 1 soft drink. How many soft drinks can he buy if he has 4 quarters and 2 dimes? 2. (b) Use red ink to shade in the area on the graph consisting of all combinations of quarters and dimes that Elmo thinks are just indifferent to having 2 quarters and 1 dime. (Imagine that it is possible for Elmo to have fractions of quarters or of dimes, but, of course, they would be useless in the machine.) Now use blue ink to shade in the area consisting of all combinations that Elmo thinks are just indifferent to having 4 quarters and 2 dimes. Notice that Elmo has indifference “bands,” not indifference curves. (c) Does Elmo have convex preferences between dimes and quarters? Yes. (d) Does Elmo always prefer more of both kinds of money to less? No. (e) Does Elmo have a bliss point? No. (f) If Elmo had arrived at the Coke machine on a Saturday, the drugstore across the street would have been open. This drugstore has a soda fountain that will sell you as much Coke as you want at a price of 4 cents an ounce. The salesperson will take any combination of dimes and quarters in payment. Suppose that Elmo plans to spend all of the money in his pocket on Coke at the drugstore on Saturday. On the graph above, use pencil or black ink to draw one or two of Elmo’s indifference curves between quarters and dimes in his pocket. (For simplicity, draw your graph
24 PREFERENCES(Ch. 3) as if Elmo's fractional quarters and fractional dimes are accepted at the corresponding fraction of their value. Describe these new indifference curves in words. Line segments with slope -2.5 3.5(0) Randy Ratpack hates studying both economics and history. The more time he spends studying either subject, the less happy he is. But Randy has strictly convex preferences (a) sketch an indifference curve for Randy where the two commodities are hours per week spent studying economics and hours per week spent studying history. Will the slope of an indifference curve be positive or e? Negative (b)Do Randy's indifference curves get steeper or fatte er as you move iron left to right along one of them? Steeper Hours studying history Preference direction 6 Hours studying economics 3.6(0) Flossy Toothsome likes to spend some time studying and some time dating. In fact her indifference curves between hours per week spent studying and hours per week spent dating are concentric circles around her favorite combination, which is 20 hours of studying and 15 hours of dating per week. The closer she is to her favorite combination, the happier
24 PREFERENCES (Ch. 3) as if Elmo’s fractional quarters and fractional dimes are accepted at the corresponding fraction of their value.) Describe these new indifference curves in words. Line segments with slope −2.5. 3.5 (0) Randy Ratpack hates studying both economics and history. The more time he spends studying either subject, the less happy he is. But Randy has strictly convex preferences. (a) Sketch an indifference curve for Randy where the two commodities are hours per week spent studying economics and hours per week spent studying history. Will the slope of an indifference curve be positive or negative? Negative. (b) Do Randy’s indifference curves get steeper or flatter as you move from left to right along one of them? Steeper. 0 246 8 2 4 6 Hours studying economics Hours studying history 8 Preference direction 3.6 (0) Flossy Toothsome likes to spend some time studying and some time dating. In fact her indifference curves between hours per week spent studying and hours per week spent dating are concentric circles around her favorite combination, which is 20 hours of studying and 15 hours of dating per week. The closer she is to her favorite combination, the happier she is
(a) Suppose that Flossy is currently studying 25 hours a week and dating 3 hours a week. Would she prefer to be studying 30 hours a week and dating 8 hours a week? Yes.(Hint: Remember the formula for the distance between two points in the plane?) (b)On the axes below, draw a few of Flossy's indifference curves and use your diagram to illustrate which of the two time allocations discussed above Flossy would prefer dating 3.7(0 Joan likes chocolate cake and ice cream, but after 10 slices of cake, she gets tired of cake, and eating more cake makes her less happy Joan always prefers more ice cream to less. Joan's parents require her to eat everything put on her plate. In the axes below, use blue ink to draw a set of indifference curves that depict her preferences between plates with different amounts of cake and ice cream. Be sure to label the axes (a)Suppose that Joan's preferences are as before, but that her parent allow her to leave anything on her plate that she doesnt want. On the graph below, use red ink to draw some indifference curves depicting her preferences between plates with different amounts of cake and ice cream Ice cream Red curves direction
NAME 25 (a) Suppose that Flossy is currently studying 25 hours a week and dating 3 hours a week. Would she prefer to be studying 30 hours a week and dating 8 hours a week? Yes. (Hint: Remember the formula for the distance between two points in the plane?) (b) On the axes below, draw a few of Flossy’s indifference curves and use your diagram to illustrate which of the two time allocations discussed above Flossy would prefer. 0 10 20 30 40 10 20 30 Hours studying Hours dating 40 (25,3) (30,8) (20,15) Preference direction 3.7 (0) Joan likes chocolate cake and ice cream, but after 10 slices of cake, she gets tired of cake, and eating more cake makes her less happy. Joan always prefers more ice cream to less. Joan’s parents require her to eat everything put on her plate. In the axes below, use blue ink to draw a set of indifference curves that depict her preferences between plates with different amounts of cake and ice cream. Be sure to label the axes. (a) Suppose that Joan’s preferences are as before, but that her parents allow her to leave anything on her plate that she doesn’t want. On the graph below, use red ink to draw some indifference curves depicting her preferences between plates with different amounts of cake and ice cream. Blue curves Red curves Ice cream Chocolate cake 10 Preference direction