Martha Modest has preferences represented by the utility function U (a, b) = ab/100, where a is the number of ounces of animal crackers that she consumes and b is the number of ounces of beans that she consumes.
(a) On the graph below, sketch the locus of points that Martha finds indifferent to having 8 ounces of animal crackers and 2 ounces of beans. Also sketch the locus of points that she finds indifferent to having 6 ounces of animal crackers and 4 ounces of beans.
(b) Bertha Brassy has preferences represented by the utility function V (a, b) = 1, 000a2b2, where a is the number of ounces of animal crackers that she consumes and b is the number of ounces of beans that she consumes. On the graph below, sketch the locus of points that Bertha finds indifferent to having 8 ounces of animal crackers and 2 ounces of beans. Also sketch the locus of points that she finds indifferent to having 6 ounces of animal crackers and 4 ounces of beans.
(c) Are Martha’s preferences convex? Are Bertha’s?
(d) What can you say about the difference between the indifference curves you drew for Bertha and those you drew for Martha? ___________________.
(e) How could you tell this was going to happen without having to draw the curves? ____________