Jeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedConsumer ChoiceJeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 4.01a Bundles of Pizzas and Burritos Lisa Might ConsumeB, Burritosper semester(a) Ranking Regions302515Z, Pizzas per semester252015100dabecfABJeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 4.01b Bundles of Pizzas and Burritos Lisa Might ConsumeB, Burritosper semester(b) Indifference Curve302515Z, Pizzas per semester252015100dabIecfJeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 4.01c Bundles of Pizzas and Burritos Lisa Might ConsumeB, Burritosper semester(c) Preference Map302515Z, Pizzas per semester252015100dI0I1I2ecfJeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 4.02a Impossible Indifference CurvesB, Burritosper semester(a) CrossingZ, Pizzas per semesterI1I0abeJeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 4.02b Impossible Indifference CurvesB, Burritosper semester(b) Upward SlopingZ, Pizzas per semesterIabJeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 4.02c Impossible Indifference CurvesB, Burritosper semesterab(c) ThickZ, Pizzas per semesterIJeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 4.03a Marginal Rate of SubstitutionB, Burritosper semester(a) Indifference Curve Convex to the Origin5381–11120–2–33456Z, Pizzas per semesterabcdIJeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 4.03b Marginal Rate of SubstitutionB, Burritosper semester(b) Indifference Curve Concave to the Origin571120–2–33456Z, Pizzas per semester abcIJeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 4.04a Perfect Substitutes, Perfect Complements, Imperfect SubstitutesCoke, Cansper week(a) Perfect Substitutes1234Pepsi, Cans per week10234I1I2I3I4Jeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 4.04b Perfect Substitutes, Perfect Complements, Imperfect SubstitutesIce cream,Scoops per week(b) Perfect Complements123Pie, Slices per week1230I1I2I3adecbJeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 4.04c Perfect Substitutes, Perfect Complements, Imperfect SubstitutesB, Burritosper semester(c) Imperfect SubstitutesZ, Pizzas per semesterIJeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedApplication Indifference Curves Between Food and ClothingFood at homeper yearClothing per yearI4I3I2I1Jeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 4.05a Utility and Marginal UtilityU, Utils∆U=20Utility function, U(10, Z)∆Z=110987654321Z, Pizzas per semester0350250(a) Utility230Jeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights Reserved, MarginalFigure 4.05b Utility and Marginal UtilityMUZ utility of pizzaMUZ10987654321Z, Pizzas per semester0130(b) Marginal Utility20Jeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 4.06 Budget ConstraintB, Burritosper semesterOpportunity set50 = Y/pZL1(pZ= $1, Y = $50)25 =Y/pB201010030Z, Pizzas per semesterabcdJeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 4.07a Changes in the Budget ConstraintB, Burritosper semester(a) Price of Pizza DoublesLoss50L1(pZ= $1)L2(pZ= $2)25250Z, Pizzas per semesterJeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 4.07b Changes in the Budget ConstraintB, Burritosper semester(b) Income DoublesGain100L3(Y=$100)L1(Y=$50)5025500Z, Pizzas per semesterJeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedSolved Problem 4.2Other goodsper week10012Gasoline, Gallons per weekBudget lineQuotaABJeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 4.08a Consumer MaximizationB, Burritosper semester(a) Interior SolutionBudget line1020255030100Z, Pizzas per semesterI1I2I3dfceagABJeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 4.08b Consumer MaximizationB, Burritosper semester(b) Corner SolutionBudget line2550Z, Pizzas per semesterI1I2I3eJeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedSolved Problem 4.3Local booksper monthY/pY/p*Y/pInternet books per montheLL*I1I2Jeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 4.09a Optimal Bundles on Convex Sections of Indifference CurvesB, Burritosper semester(a) Strictly Concave Indifference CurvesZ, Pizzas per semesteredI2I1I3BudgetlineJeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 4.09b Optimal Bundles on Convex Sections of Indifference CurvesedI2I1B, Burritosper semester(b) Concave and Convex Indifference CurvesZ, Pizzas per semesterBudgetlineJeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedSolved Problem 4.4French mealsper yearAmerican meals per yearafLALFI1I2Jeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 4.10 Food Stamps Versus CashAll other goodsper monthYY+ 100Y + 1000 100Food per monthBudget line withfood stampsBudget line with cashOriginalbudget
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