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1. (25 points) Consider the following 8 bundles of goods r and y A = (8, 4) B = (5,6) C = (5,9) D =
1. (25 points) Consider the following 8 bundles of goods r and y A = (8, 4) B = (5,6) C = (5,9) D = (10,3) E = (1,4) F = (6, 5) G = (2,8) H = (7,8) (a) (8 points) Come up with an example of a utility function that will produce the following order of preference for the bundles: H > C >B >F > A ~ G> D> E where H is most preferred, E is least preferred, and A and G are equally linked. Prove that your utility function gets the correct utility ranking of bundles. (Hint: Try utility functions of Cobb-Douglas form) (b) (2 points) Come up with a new bundle, called bundle I, that has the same utility level as bundle E but has different quantities of good x and good y AND has more of good x than it does of good y. Explain clearly how your bundle I satisfies these requirements.() (12 points) Graph and label bundles A = F on the following grid. Graph the indifference curves that go through each point and specify the utility level of cach indifference curve. Make sure to label the bundle, the utility level, the axis, and to number the axis. (d) (3 points) Give an example of another utility function that represents the same preferences that vou came up with in part (a). Explain how two functions can represent the same preferences
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