Chapter 3
Drawing Indifference Curves: Some Additional Practice Questions
Suppose there are two goods, X and Y. Roger likes good Y and gets a constant marginal utility
as he consumes more of Y regardless of the amount of Y he consumes (i.e. MUy is the
same constant value regardless of the amount of Y he is consuming). However, Roger has some
reservations about good X. If he consumes fewer than 4 units of good X, he likes good X and is
willing to trade 1/2 unit of good Y for every additional unit of good X with equal satisfaction.
However, after 4 units of good X he begins to dislike good X and has to be given 1 unit of good
Y for every additional unit of good X he is forced to consume. Graph an indifference
curve for Roger (hint: the indifference curve changes shape after the critical value of
X=4). Also, draw arrows of increasing preference.
Suppose there are two goods, X and Y. Though good X and good Y are both BADS, Sam is
forced to eat them, but has diminishing (decreasing) marginal disutility as consumption of either
good increases (i.e. MDUx falls as X increases and MDUy falls as Y increases), perhaps because
he becomes more accustomed to the bad taste. Graph an indifference curve and draw an arrow
of increasing preference.
Suppose there are two goods, X and Y. Benjamin likes good Y, but has some reservations about
good X. If he consumers fewer than 3 units of good X, he likes good X and reveals a
diminishing marginal rate of substitution between good X and good Y as he consumes more
good X. However, he refuses to have more than 3 units of good X as it would make him sick.
Graph an indifference curve for Benjamin (hint: the indifference curve changes shape after the
critical value of X=3). Also, draw arrows of increasing preference.
Tags: curves, Help, Indifference, Please, sketching