Professor Stern\'s colleague, Dr. Schmertz, gives one midterm exam and a final e

Question

Professor Stern's colleague, Dr. Schmertz, gives one midterm exam and a final exam. He weights the final twice as heavily as the midterm to determine the course grade. No grades can be dropped. If the midterm score is represented on the horizontal axis and the final score on the vertical axis, and if a student in Dr. Schmertz's class cares only about her course grade, her indifference curve is (a) a line with slope -2. (b) a line with slope -1. (c) a line with slope - 0:5. (d) L-shaped with the kink at (x, 2x). (e) L-shaped with the kink at (2x, x).

Explanation / Answer

(c) a line with slope - 0.5

Let X be the score on midterm exam and Y be the score on final exam, the total marks for grade = 2Y + X

Student's Utility U = 2Y + X. For any fixed level of U, say c, the indifference curve equation is

2Y + X = c => Y = -X/2 + c/2

Hence, the IC is straight line with slope = -1/2 = 0.5 (the coefficient on X in the IC equation)

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