Asked by Brooke Rupert on May 18, 2024
Verified
recall that Tommy Twit's mother measures the departure of any bundle from her favorite bundle for Tommy by the sum of the absolute values of the differences.Her favorite bundle for Tommy is (2, 7) , that is, 2 cookies and 7 glasses of milk.Tommy's mother's indifference curve that passes through the point (c, m) (4, 5) also passes through
A) the points (2, 3) , (6, 7) , and (4, 9) .
B) the point (6, 3) .
C) the point (2, 7) .
D) the points (4, 7) , (2, 5) , and (2, 9) .
E) None of the above.
Indifference Curve
An indifference curve represents a combination of two goods between which a consumer is indifferent, showing equal utility or satisfaction levels.
Absolute Values
A number's distance from zero on the number line, disregarding its direction; always a non-negative value.
Favorite Bundle
The combination of goods or services that maximizes an individual's utility given their budget constraints.
- Comprehend the idea of indifference curves and the equations that represent them.
- Understand the intricacies of consumer decision-making by visually depicting their preferences.
Verified Answer
HG
Harman GahouriaMay 21, 2024
Final Answer :
A
Explanation :
The indifference curve is defined by the sum of the absolute values of the differences from the favorite bundle (2, 7). For the point (4, 5), the total difference is |4-2| + |5-7| = 2 + 2 = 4. Points (2, 3), (6, 7), and (4, 9) also have a total difference of 4 from the favorite bundle, making them on the same indifference curve.
Learning Objectives
- Comprehend the idea of indifference curves and the equations that represent them.
- Understand the intricacies of consumer decision-making by visually depicting their preferences.