Question

Consider the following cases where preferences are characterized by some unusual utility functions. For each utility, carefully draw a set of 3 indifference curves withU1 <U2<U3.

a) Peter consumes good apples together with bad, poisonous ones that she dislikes.

b) Bob consumes herbal products regularly. However, some herbs become ineffective when being taken in conjunction. Regarding two herbal products, A and B, Winnie’s utility function is given by U(A, B) = max (A, 3B). Given PX = 0.4, PY = 1, and I = 24, also solve for the optimal consumption bundle and show it on the graph.

Answer 1

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