Question
There are two goods: salmon and fries. Let S represent weekly consumption of salmon and F represent weekly consumption of fries. A unit of salmon
There are two goods: salmon and fries. Let S represent weekly consumption of salmon and F represent weekly consumption of fries. A unit of salmon contains 100 calories,while a unit of fries contains 300 calories. For each of the following descriptions of a consumer's preferences, draw the corresponding indifference curves in a graph with S on the horizontal axis and F on the vertical axis. Moreover, indicate in which direction utility is increasing:
(a) [5 marks] Generally I like more food rather than less. But I like to accompany each portion of salmon with a portion of fries. I throw away any extra salmon not accompanied by fries and I throw away any extra fries not accompanied by salmon.
(b) [5 marks] I like fries but I hate salmon. If I am served salmon, I just throw it away.
(c) [5 marks] Food is food. I do not care how I get my calories. The more calories I get, the happier I am.
(d) [5 marks] I am very particular about what I eat. I always try to consume 20 units of salmon and 15 units of fries a week. Any departure from this routine makes me unhappy. The greater the departure, the greater my unhappiness.
(e) [5 marks] I like both salmon and fries and like more food rather than less. However, I prefer to eat each food stuff separately. I would need 3/4 of a unit of both goods to make me as happy as having 1 of each on its own
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