Sofia will consume hot dogs only with whipped cream. Show her preference map. Wh

Question

Sofia will consume hot dogs only with whipped cream. Show her preference map. What is her utility function?

She also requires a minimum level of consumption, a threshold, to derive additional utility: U(X,Z) is 0 if X + Z is less than or equal to 5 and is X + Z otherwise. Draw Sofia's indifference curves. Which of our preference assumptions does this example violate?

Explanation / Answer

U(X,Z) = X + Z for (X+Z)>5 It violates the assumption that indifference curves are continuous (the area bounded by x + y < 5 is not part of the curve). Also, since she requires equal amounts of X&Y, her indifference curve is a straight line represented by the following equation: y = x for x >2.5

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.