Asked by Tanya Woods on Jul 29, 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) (5, 4) also passes through
A) the points (5, 7) , (2, 4) , and (2, 10) .
B) the points (2, 1) , (8, 7) , and (5, 10) .
C) the point (8, 1) .
D) the point (2, 7) .
E) None of the above.
Absolute Values
A mathematical operation that measures the distance of a number from zero on the number line, disregarding direction.
Indifference Curve
A graphical representation showing different combinations of two goods that provide an individual with the same level of satisfaction.
Favorite Bundle
In economic theory, it refers to the most preferred combination of goods and services by an individual or consumer.
- Examine the characteristics of indifference curves across various categories of products, such as normal goods, perfect complements, and items experiencing decreasing marginal rates of substitution.
- Gain an understanding of the role indifference curve analysis plays in interpreting consumer preferences for various bundles of goods.
Verified Answer
ZT
Zarjina Tarana KhalilJul 30, 2024
Final Answer :
B
Explanation :
Since the indifference curve passes through (5,4), this means that the difference between 5 cookies and 2 cookies plus the difference between 4 glasses of milk and 7 glasses of milk equals the departure from Tommy's mother's favorite bundle. So, we have:
|5-2| + |4-7| = 6
This means that any point (c,m) on the same indifference curve must also satisfy:
|c-2| + |m-7| = 6
The only points that satisfy this equation are (2,1), (8,7), and (5,10), which are all on the same indifference curve as (5,4). Therefore, the answer is B. The point (2,7) is Tommy's mother's favorite bundle, so it does not necessarily have to be on the same indifference curve as (c,m).
|5-2| + |4-7| = 6
This means that any point (c,m) on the same indifference curve must also satisfy:
|c-2| + |m-7| = 6
The only points that satisfy this equation are (2,1), (8,7), and (5,10), which are all on the same indifference curve as (5,4). Therefore, the answer is B. The point (2,7) is Tommy's mother's favorite bundle, so it does not necessarily have to be on the same indifference curve as (c,m).
Learning Objectives
- Examine the characteristics of indifference curves across various categories of products, such as normal goods, perfect complements, and items experiencing decreasing marginal rates of substitution.
- Gain an understanding of the role indifference curve analysis plays in interpreting consumer preferences for various bundles of goods.