Dmitri enjoys both pretzels and seltzer. Assume that the "more is better" principle holds for Dmitri, meaning that he would always prefer to consume more of either good, holding the level of consumption of the other good constant. The two figures below present information regarding Dmitri's preferences. The points on Figure 1 represent combinations of seltzer and pretzels that Dmitri might choose to consume. Figure 2 plots the same points as Figure 1, but it also shows some of Dmitri's indifference curves: I1, I2, and I3. Thus, Figure 2 gives more insight into Dmitri's preferences than Figure 1. PRETZELS (Bags) E Figure 1 SELTZER (Cans) A 0 H B E ☐ 0 0 с ? 0 F 0 PRETZELS (Bags) 0 Complete the following table by indicating which bundles Dmitri strictly prefers to D given only the information in each figure. Information Given By... Figure 1 Figure 2 G 0 0 H E 00 11 12 13 B Figure 2 O A SELTZER (Cans) (?)

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Chapter3: Preferences And Utility
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3. Indifference curves and preferences
Dmitri enjoys both pretzels and seltzer. Assume that the "more is better" principle holds for Dmitri, meaning that he would always prefer to consume
more of either good, holding the level of consumption of the other good constant.
The two figures below present information regarding Dmitri's preferences. The points on Figure 1 represent combinations of seltzer and pretzels that
Dmitri might choose to consume. Figure 2 plots the same points as Figure 1, but it also shows some of Dmitri's indifference curves: I1, I2, and I3.
Thus, Figure 2 gives more insight into Dmitri's preferences than Figure 1.
PRETZELS (Bags)
O
Figure 2
O
Figure 1
SELTZER (Cans)
O
A
L
B
H
L
с
0
E
|
F
PRETZELS (Bags)
L
G
Complete the following table by indicating which bundles Dmitri strictly prefers to D given only the information in each figure.
Information Given By...
Figure 1
r
E
H
Statement
Figure 1 indicates that Dmitri is indifferent among bundles E and bundles B.
Figure 2 indicates that Dmitri prefers bundle E to bundle B.
Indicate whether each of the following statements is true or false given the graphs.
O
B
12 13
O
O
G
O
Figure 2
O
True False
A
SELTZER (Cans)
H
Transcribed Image Text:3. Indifference curves and preferences Dmitri enjoys both pretzels and seltzer. Assume that the "more is better" principle holds for Dmitri, meaning that he would always prefer to consume more of either good, holding the level of consumption of the other good constant. The two figures below present information regarding Dmitri's preferences. The points on Figure 1 represent combinations of seltzer and pretzels that Dmitri might choose to consume. Figure 2 plots the same points as Figure 1, but it also shows some of Dmitri's indifference curves: I1, I2, and I3. Thus, Figure 2 gives more insight into Dmitri's preferences than Figure 1. PRETZELS (Bags) O Figure 2 O Figure 1 SELTZER (Cans) O A L B H L с 0 E | F PRETZELS (Bags) L G Complete the following table by indicating which bundles Dmitri strictly prefers to D given only the information in each figure. Information Given By... Figure 1 r E H Statement Figure 1 indicates that Dmitri is indifferent among bundles E and bundles B. Figure 2 indicates that Dmitri prefers bundle E to bundle B. Indicate whether each of the following statements is true or false given the graphs. O B 12 13 O O G O Figure 2 O True False A SELTZER (Cans) H
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