Sentence completion choice selection (for both sentences): increase, decrease, d

Question

Sentence completion choice selection (for both sentences): increase, decrease, does not affect.

5. Economic bads and useless goods Assume Albert dislikes sitting in traffic and likes reading. Given these preferences, decreasing Albert's time spent reading while holding time spent sitting in traffic constant time spent sitting in traffic while holding time spent reading constant Albert's utility. Increasing Albert's his utility. The following graphs depict two separate sets of indifference curves. Based on the previous part, select the graph that reflects Albert's preferences (with utility increasing from U1 to U2 to U3) HOURS OF TRAFFIC HOURS OF TRAFFIC U1 U2 U3 HOURS OF READING HOURS OF READING

Explanation / Answer

Decreases because studying gives him utility and less reading means less utility

Decreases because more time spent in traffic gives him disutility

2nd graph is right answer. The reason is traffic gives him disutility. To keep his utility constant he should read more so that indifference curves are upward sloping

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