1. (I) (9 marks) Rachel makes the following preference statements about bundles containing Gucci shoes(x) and Prada bags(y): (1,12)(4,3) (4,6)(3,8) (1,18)(3,6) (a) Using the appropriate assumptions about consumer preferences, construct Rachel's preference ordering (order all bundles). Explain which assumption(s) you are using and when. (b) Check whether the function u( x, y) = xy can reflect Rachel's tastes. (c) If Rachel currently has the bundle (3, 8), is she willing to trade it for bundle (5, 4)? Why or why not?

(II) (9 marks) Draw typical indifference curves for the following cases: (a) Brand-name and generic aspirin, for a consumer who believes that they are functionally equivalent. Generic aspirin is less expensive. (b) Right gloves and left gloves for a consumer who only wants gloves in matched pairs. (c) Right gloves and left gloves for a one-handed person (right hand only).

l. {I} (9 marks) Rachel makes the following preference statements about bundles containing Gucci shoes[K} and Prada bags[y): (1:13)~(4,3J (455%(33) (l.18)~(3,6) (a) Using the appropriate assumptions about consumer preferences= construct Rachel's preference ordering (order all bundles). Explain which assumption(s) you are using and when. (b) Check whether the mction \"is", y} =30; can reect Rachel's tastes. (c) If Rachel currently has the bundle (3, B}, is she willing to trade it for bundle [5, 4}? Why or why not? (II) (9 marks) Draw typical indifference curves for the following cases: (a)Brand-nan1e and generic aspirin, for a consumer who believes that they are functionally equivalent. Generic aspirin is less expensive. (b) Right gloves and left gloves for a consumer who only wants gloves in matched pairs. (c) Right gloves and left gloves for a one-handed person (right hand only)