Question

The standard assumptions regarding consumer preferences include: completeness, transitivity, satiation, and a diminishing willingness to sacrifice a good the more you have of another good. non- 1. Illustrate and explain why indifference curves cannot cross. Which assumption would be violated? a. b. Illustrate and explain why indifference curve are not upward sloping. Which assumption would be violated? 2. Suppose there are two consumers, Hillary and Donald, who have preferences over Mexican food and Middle Eastern food. Both consumers' preferences satisfy the standard assumptions and both consumers like both types of food. However Donald prefers Mexican food (particularly from a food truck) over Middle Eastern food and Hillary prefers Middle Eastern food over Mexican food. Sketch and indifference curve for each consumer with Mexican food on the horizontal axis and Middle Eastern food on the vertical axis. Do you expect the shapes of these indifference curves to differ? Explain why you drew the indifference curves the way you did.

Answer 1

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