Answer to Question #279247 in Macroeconomics for ayeza

Question

1.     Draw indifferences curves to represent each of the following type of preferences.

(i)  A customer is always pleased to change 5 sweet candy for 1 chochlate bar.

(ii) A customer always desires 2 glasses to wear with 1 frame.

Answer 1

(i) If a customer is always pleased to change 5 sweet candy for 1 chochlate bar, then the indifference curves will be represented as a set of parallel steep downward-sloping lines, as these goods are substitutes in consumption.

(ii) If a customer always desires 2 glasses to wear with 1 frame, then the indifference curves will be represented as a set of right-angle vertical and horizontal parts starting from points on one line.