Question

8. Suppose you are taking two classes, economics and physics. In each class,

only two exams are given during the semester. Since economists are nice

people, your economics professor drops the lower exam grade and bases

your entire grade on the higher of the two grades. Physicists are another

story. Your physics professor will do the opposite by dropping your highest

grade and basing your entire class grade on your lower score.

(a) With the rst exam grade (ranging from 0 to 100) on the horizontal

axis and the second exam grade (also ranging from 0 to 100) on the

vertical, illustrate your indierence curves for your physics class.

(b) Repeat this for your economics class.

Answer 1

a) Let the grade scored in Physics in first exam be Y1 and the grade scored in second exam be Y2

As the Physics professor drops the highest grade and considers only the lower grade, so we can represent his grading technique as    U = min { Y1 , Y2} , where U is the grade he is going to consider.

This grading technique represents that both the grades are perfect complements to him. Thus the indifference curve for physics class will be L – shaped.

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The blue lines represents the indifference curves.

b) Let the grade scored in Economics in first exam be X1 and the grade scored in second exam be X2

As the Economics professor drops the lower grade and considers the higher grade, so we can represent his grading technique as    V = max { X1 , X2} , where V is the grade he is going to consider.

Thus the indifference curve for Economics class will be inverted L – shaped.

1) 30 Гоо Тоо

The blue lines represents the indifference curves.