Bird Mccarthy
08/13/2024 · Elementary School

Question \#2: In each of the following examples, the consumer consumes only two goods, X and Y . Based on the information given in each statement, sketch a plausible set of indifference curves (draw at least two curves on a set of labeled axes and indicate the direction of higher utility). Then, write down a possible form of the utility function \( U(X, Y) \) that is consistent with your graph. A. Allen likes wearing both right shoes \( (\mathrm{X}) \) and left shoes \( (\mathrm{Y}) \). He always needs to wear them as a pair, having a right shoe is useless without the left one and vice versa B. Eman likes pizza \( (\mathrm{X}) \) but hates vegetables \( (\mathrm{Y}) \). She is only willing to eat an extra unit of vegetables if she gets to eat an extra unit of pizza. C. Mary likes Chat cola \( (\mathrm{X}) \) and Pepsi cola (Y). She is indifferent between them as she is unable to tell the difference between Chat cola and Pepsi cola.

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For Allen's shoes, the utility function is \( U(X, Y) = \min(X, Y) \). For Eman's pizza and vegetables, the utility function is \( U(X, Y) = X - kY \). For Mary's colas, the utility function is \( U(X, Y) = X + Y \).

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