Assume that Maria does not have a preference for smooth consumption. In particular, the average of two
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Assume that Maria does not have a preference for smooth consumption. In particular, the average of two consumption points on the same indifference curve yields the same utility to Maria as either point (i.e., the average consumption point is on the same indifference curve as the other two points).
a) Draw Maria’s indifference curves.
b) What is the implication of Maria’s preferences for the marginal rate of substitution?
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