Problem Set #1 and #2: Mapping Consumer Preferences and Market Demand Curves 1. Utility Function (one consumer, X "goods" case with varying health states) a. (1.5 pt) Evaluate the utility curve below (Figure 1). i. At what point is the highest utility? ii. At what point is the marginal utility highest? ii. At what point is the marginal utility lowest? b. Examine the Indifference Curves below (Figure 2). Answer (T/F) i. X1 in Indifference curve = X1 in the Utility Curve in Figure 1 ii. A=A; B=B; in the Utility Curve in Figure 2 iii. Indifference Curves = Utility Function Utility H3 HZ H1 U (x2) Upan X1 X2 X3 X goods Figure 1 Indifference Curves Health H2 WE H1 U2 U1 X1 X2 Figure 2