16 Tools U2 10 CO Ul 4 2 46810 12 14 16 Biscuits b. In each of the following set

Question

16 Tools U2 10 CO Ul 4 2 46810 12 14 16 Biscuits b. In each of the following sets, determine which bundle is preferred (i) Bundle A includes 2 biscuits and 9 cups of coffee. Bundle B includes 7 biscuits and 5 cups of coffee Bundle A O Bundle EB Maria is indifferent between Bundles A and B (ii) Bundle C includes 11 biscuits and 4 cups of coffee. Bundle D includes 3 biscuits and 11 cups of coffee Bundle C Bundle D Maria is indifferent between Bundles C and D (iii) Bundle E includes 7 biscuits and 5 cups of coffee. Bundle F includes 3 biscuits and 6 cups of coffee Bundle E Bundle F Maria is indifferent between Bundles E and F

Explanation / Answer

i) the correct option is bundle B. since bundle B is on the higher indifference curve so it yields a higher utility so it is preferred.

ii) the correct option is maria is indifferent between bundles C and D. Since both the bundles are on the same indifference curve so both yield the same utility.

iii) the correct option is bundle E. Since bundle E is on the higher indifference curve so it yields a higher utility.

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