Figure 4.3
2) Draw the indifference curves for rock concerts and food for each of the following:
a) a typical 17-year-old
b) a typical 75-year-old
Answer: See Figure 4.3. These graphs assume that a typical 17-year-old would enjoy both food and rock concerts. The 75-year-old might find the rock concerts neutral or even bad.
Diff: 1
Topic: Preferences
Figure 4.4
3) Draw the indifference curves for nickels and dimes. Would they ever have a non-constant slope? Explain.
Answer: See Figure 4.4. Two nickels are worth 1 dime. Yet, for extremely large amounts of money, people might prefer dimes to nickels for carrying purposes. That is why people often pay with exact change or don't like to break a twenty.
Diff: 1
Topic: Preferences
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