Consider Katies preferences for magazines and ice cream cones. Several consumption bundles are shown in the table

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Consider Katie’s preferences for magazines and ice cream cones. Several “consumption bundles” are shown in the table below.

Bundle

Ice Cream Cones

Magazines

a

9

0

b

7

2

c

6

2

d

5

3

e

4

4

f

4

3

g

3

4

h

2

6

i

0

6


a. On a scale diagram with the quantity of ice cream cones on the vertical axis and the quantity of magazines on the horizontal axis, plot and label the various bundles.

b. Suppose that Katie is indifferent between bundles c and She is also indifferent between bundles d, g, and h, but all three of these are preferred to c or i. Finally, suppose that, of the bundles shown in the table, bundle e is Katie’s favourite. Draw three indifference curves showing this information.

c. Consider bundles e, f, and g. What can you conclude about how Katie would rank these bundles?

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Related Book For  answer-question

Microeconomics

ISBN: 9780134835839

16th Canadian Edition

Authors: Christopher T.S. Ragan

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