Refer to the graph of Question 4.3 (0)

How to determine what points to plot in the tangent line (black ink), indifference curve (blue ink), and red line?

Why does it end in (1,16) and (10,0)? *correct me if I'm wrong

What does the line segment ab mean? Please give numerical illustrations to help me understand.

How is the indifference equation through point (4,6) derived? (highlighted in blue)

38 UTILITY (Ch. 4) NAME 39 4.3 (0) Burt's utility function is U(21, 12) = (21 + 2)(12 + 6), where 21 "Ernie, you are right that my marginal rate of substitution is -2. That is the number of cookies and r2 is the number of glasses of milk that he means that I am willing to make small trades where I get more than 2 consumes. glasses of milk for every cookie I give you, but 9 glasses of milk for 3 cookies is too big a trade. My indifference curves are not straight lines, (a) What is the slope of Burt's indifference curve at the point where he you see." Would Burt be willing to give up 1 cookie for 3 glasses of milk? is consuming the bundle (4,6)? -2 . Use pencil or black ink to draw a line with this slope through the point (4.6). (Try to make this graph Yes, U(3, 9) = 75 > U(4, 6) = 72. Would Burt object to fairly neat and precise, since details will matter.) The line you just drew is the tangent line to the consumer's indifference curve at the point (4, 6). giving up 2 cookies for 6 glasses of milk? No, U (2, 12) = 72 = (b) The indifference curve through the point (4, 6) passes through the U(4, 6) . points ( 10 ,0), (7, 2 ), and (2, 12 ). Use blue ink (e) On your graph, use red ink to draw a line with slope -3 through the to sketch in this indifference curve. Incidentally, the equation for Burt's point (4, 6). This line shows all of the bundles that Burt can achieve by indifference curve through the point (4,6) is r2 = 72/ (21 + 2)-6. trading cookies for milk (or milk for cookies) at the rate of 1 cookie for every 3 glasses of milk. Only a segment of this line represents trades that Glasses of milk make Burt better off than he was without trade. Label this line segment on your graph AB. 16 4.4 (0) Phil Rupp's utility function is U(r, y) = max {r, 2y). 12 b (a) On the graph below, use blue ink to draw and label the line whose equation is 2 = 10. Also use blue ink to draw and label the line whose --Red Line equation is 2y = 10. 00 (b) If x = 10 and 2y