Draw two indifference curves for each of the following pairs...

Draw two indifference curves for each of the following pairs of goods. Put the quantity of the first good on the horizontal axis and the quantity of the second good on the vertical axis. a. Paul likes pencils and pens, but does not care which he writes with. b. Rhonda likes carrots and dislikes broccoli. c. Emily likes hip-hop iTunes downloads and doesn't care about heavy metal downloads. d. Michael only likes dress shirts and cufflinks in 1 to 2 proportions. e. Carlene likes pizza and shoes.

Transcript

00:01 So here, we have a whole bunch of statements about preferences.

00:04 And i'm going to try to draw out all of these, right? so a is the sort of equal preferences.

00:10 Well, if you've got equal preferences, they look like this, right? perfectly linear.

00:15 Because it doesn't matter if he has four pens or four pencils, he feels the same, right? so all combinations are going to be identical for him, right? and his indifference map is going to look like this.

00:28 For b, likes carrots.

00:34 And so here this is, oh, i should label them.

00:38 So this is pens or pencils, and this is pens.

00:44 Now for rhonda, we have carrots and dislikes broccoli.

00:51 So now our indifference curves are going to look pretty weird because we have to think about what happens as we change, right? so here, let's suppose this is one point.

01:02 She likes carrots.

01:04 So more carrots would make her happier.

01:06 So to stay on the same indifference curve, she needs to be at the same level of happiness.

01:11 To bring her happiness back down, we need more broccoli, right? so the more broccoli offsets the more carrots and her indifference curves are going to look somewhere like something like this, right? where the extra carrots are traded off against the more carrots.

01:28 The broccoli that she dislikes.

01:33 Now for c we have a different situation, likes hip hop and indifferent towards metal.

01:49 To metal, so if i again try to draw this preference relation, we are going to have hip hop...

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