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ECON2101: Microeconomics 2
Assignment 1
Term 1, 2024
Information:
1. DEADLINE: 6pm Friday, the 14th of June 2024.
2. The assignment comprises 1 pages excluding this cover page.
3. There are 2 questions. Answer all questions.
4. There are a maximum of 10 points to obtain in this assignment.
5. This assignment is worth 5 course marks.
6. Show your work in all questions, unless otherwise stated. Marks will be awarded for procedure
and reasoning, as well as for correct answers.
7. Illegible working and diagrams may not be awarded full marks. Ensure your writing is
sufficiently large and your scans are clear.
8. Submit your assignment as a PDF on Moodle. Please check that your file can be opened after
making your submission. Submissions which cannot opened will receive a mark of zero.
9. Late assignments will attract a penalty of 5% for each day it is late or part thereof. Techno-
logical failure is not a valid excuse for special consideration.
10. Any evidence of academic misconduct will be reported to the academic integrity
committee and may result in a mark of zero being awarded for this assessment
item or the course.
Question: 1 2 Total
Points: 4 6 10
Score:
Question 1 (4 points)
Triplets Darcy, Eden, and Francis are at the shop with their parents and must decide between
one of three video games to buy for their upcoming birthdays. The three games are Aerodrome
Acrobatics (A), Busway Busyness (B), and Chattanooga Choo Choo (C). Darcy, Eden, and
Francis each individually have strict preferences over these games given by ?D,?E, and ?F
respectively. Their preferences are given as follows:
The parents ask their triplets to construct a strict social preference ?S using the following rule:
the triplets as a group prefer game X over game Y if and only if two out of three of them
individually prefer game X over game Y .
(a) (2 points) Is this strict social preference complete? If so, provide the complete ranking
given by ?S. If not, provide a counterexample of a pair of video games that cannot be
compared using ?S.
(b) (2 points) Is this strict social preference transitive? If so, show that it is. If not, provide
a counterexample.
Question 2 (6 points)
Leslie likes to eat apples and bananas. Her preferences over these fruits can be represented by
the utility function u(a, b) = ?(a? 3)2 ? 2(b? 4)2. Assume that apples and bananas must be
consumed in non-negative quantities, but that they are perfectly divisible.
(a) (1 point) On Leslie s consumption space, plot the three indifference curves which go through
the bundles (a, b) = (0, 6), (6, 0) and (0, 10). Remember to label both axes, the direction
of preference, and the utility levels associated with each indifference curve.
(b) (1 point) Are Leslie s preferences strongly monotone? If so, provide a reason. If not,
provide a counterexample.
(c) (1 point) Are Leslie s preferences monotone? Explain.
(d) (1 point) Are Leslie s preferences strictly convex? If so, provide a reason. If not, provide
a counterexample.
(e) (1 point) Are Leslie s preferences convex? Explain.
(f) (1 point) What is the shape of the indifference curve which goes through the bundle
(a, b) = (3, 4)?
ECON2101 Assignment 1 1