MICROECONOMICS

3. Indll'l'erenoe curves and preferences Janet likes both soda and ice cream. Assume that the "more is better" principle applies to Janet; that is, she would always prefer to consume more of either good, holding the consumption of the other good constant. The points on Figure 1 represent combinations of ice cream and soda that Janet might choose to consume. Figure 2 shows the same points as Figure 1, but it also shows some ofJanet's indifference curves: 11 , 1'1, and [3. These curves show more information about Janet's preferenoes than Figure 1. @. .. Figure 1 Figure 2 SODA [Cans] SODA [Cans] ICE CREAM [Cones] ICE CREAM [Cones] Complete the following table by indicating which bundles Janet strictly prefers to F given only the information in each figure. Information Given By... A B C D E G H Figure 1 O O O O O O O Figure 2 O O Indicate whether each of the following statements is true or false given the previous graphs. Statement True False Figure 1 indicates that Janet is indifferent among bundles A and bundles H O O Figure 2 indicates that Janet prefers bundle A to bundle H O O