ECO3020F 2024: TUTORIAL ONE SOLUTIONS
TOTAL MARKS 59 MARKS
Question 1 [4 marks]
Consider the image below for this question.
1. Explain what must be true, and why, about the utility at points a, point b, and point c.
Same IC curve sameutility indifferent [3 marks]
combos of goodsforwhich a person is indifferentbetweenothercombos
2. Rank the utility associated with points a, b, c, d, and e from the highest utility to the
lowest utility. [1 mark]
e a b c d
Question 2 [12 marks]
Consider Person A and Person B bargaining over the allocation of good x and good y.
, B'sgood X xB
3
1 88 U I
4A 1 pec
I
I
8
Pareto I
4 1m46'59 12 4
1 1
88 4A I
1
7
TUB Ip
1 8
00 4 S
A
A's good 0C
endowment
2 initial
B
finalendowment
TOTAL MARKS 59 MARKS
Question 1 [4 marks]
Consider the image below for this question.
1. Explain what must be true, and why, about the utility at points a, point b, and point c.
Same IC curve sameutility indifferent [3 marks]
combos of goodsforwhich a person is indifferentbetweenothercombos
2. Rank the utility associated with points a, b, c, d, and e from the highest utility to the
lowest utility. [1 mark]
e a b c d
Question 2 [12 marks]
Consider Person A and Person B bargaining over the allocation of good x and good y.
, B'sgood X xB
3
1 88 U I
4A 1 pec
I
I
8
Pareto I
4 1m46'59 12 4
1 1
88 4A I
1
7
TUB Ip
1 8
00 4 S
A
A's good 0C
endowment
2 initial
B
finalendowment
