Question 3 15 pts Definitions of important concepts - Part II (Chapter 6) a. What is a price offer curve? How is it obtained using a constrained utility maximization set up? Illustrate using budget constraints and a family of well-behaved indifference curves? b. How is a demand curve related to a price offer curve? c. Illustrate the price offer curves and demand curves for perfect substitutes and perfect complements? (5 pts each for a total of 15 pts) Upload Choose a FileQuestion 4 25 pts WARP and SARP (Chapter-7) a. What is stated in the WARP axiom? Illustrate an example of choices which violate the WARP and do not violate the WARP on separate plots. (5 pts) b. What is stated in the SARP axiom? (5 pts) c. How is the WARP axiom checked for in empirical studies? (ie: How does an economist check whether the stated choices of a decision maker satisfies or violates the WARP?) (5 pts) d. What is the Laspayres quantity index? What is the Paasche quantity index? How are they used to check whether a consumer's welfare improves between two chosen consumption bundles? (10 pts) Upload Choose a File No new data to save. Last checked at 5:49pm Submit Quiz MacBook Air