Question 1 (8 points) Cynthia likes playing video games and watc hing Netflix sh

Question

Question 1 (8 points) Cynthia likes playing video games and watc hing Netflix shows. While Cyn- er watching after 6 hours of Netflix shows in one day she starts to feel sick if she continues watching more Netflix shows. thia alw Draw an indifference map that represents Cynthia's preferences over con- sumption bundles that consist of two goods: hours playing video games in one day and hours watching Netflix in one day. Use an arrow to indicate the direction of increasing utility. 12 r 10 10 11 12 Video Game Playing (Hours/Day)

Explanation / Answer

Maximum number of hours for watching videos on Netflix = 6 hours

Maximum number playing video games can be 24 hours as well; the time constraint line is a straight line, and, the indifference curve is tangent to the straight line.

Utility increases as the number of hours playing video games increases. Beyond 6 hours utility decreases for watching videos on Netflix.

The time constraint will be a line with coordinates (12, 6)

Utility will increase as the number of hours playing video games increases.

Slope for time constraint = - 1/2

As one hour of netflix videos decreases, one can increase the number of hours playing video games.

There can be many indifference curves with different combination of goods; these are tangent to the time constraint.

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