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Preferences. 1. Two consumers, Amr and Chris, have utility functions that depend on their consumption of...

Preferences. 1. Two consumers, Amr and Chris, have utility functions that depend on their consumption of 2 goods: Books on Monetary Economics (M), and Books on Economic Development (D): Amr’s Utility = ?? 1 5?? 4 5 and Chris’s Utility = ?? 1 2?? 1 2. a. What is each consumer’s Marginal Rate of Substitution � ???? ????�, i.e., conceiving of D as the horizontal axis good? b. Which consumer “likes” Economic Development books more? c. Graph Amr’s indifference curves for ?? = 8 and ?? = 18 with D on the horizontal axis. d. Graph Chris’s indifference curves for ?? = 8 and ?? = 18 with D on the horizontal axis

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Answer #1

beoe Reaping M than that os ig n 8-Mvg D415之 D415 D)千 D 2answer c) IC

350O 300 250 200 1.50 100 50 ooks on Economic Development 20 40red color , when U = 8

Blue colour , when U= 18

Answer d) IC

6 4 0 8 muu ou oog Ale-auonuo spog 3 3 2 0 2 0green colour when U = 8

Black Color when U = 18

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